Basingstoke and Deane Borough Council is planning to reduce its cash resources for treasury investments by up to £100m over the next five years.
The decision, based on financial risk advice from Arlingclose, will reduce the council’s exposure in the event of a bank collapse.
Under legal directives, the recapitalisation of a bank would be at the expense of deposit holders like the council rather than the government.
The council’s strategy will move £90m of its longer-term cash investments into property investments following £15m that has already been moved.
The returns are projected to be in excess of the budget strategy income target by 2021/22.
A report to councillors said: “Over the past year the council has continued its strategy to limit credit risk and take steps to decrease the credit risk of the in-house portfolio.”
It added: “The alternative investments have the potential to generate returns in excess of the budget strategy income target by 2021/22 and therefore reduce the need to generate increased returns from treasury investments.”
