Council Launches Second Phase of Green Investment Fund
Offering 4.6% return to resident willing to provide capital
Cllr Rowan Ree promoting the council's latest fundraising. Picture: HF Council
February 28, 2024
Hammersmith & Fulham Council is inviting residents to fund environmental projects from community gardens to heat pumps, with the promise of an annual return of 4.6 per cent. The council) launched the second phase of its Green Investment scheme this Monday (26 February), saying it has met its stage-one target earlier this year.
Cllr Rowan Ree, Cabinet Member for Finance and Reform, said the plan offers ‘a rare win-win-win’, enabling the council to borrow for important projects at a better rate than it otherwise would, while allowing residents access to a “low-risk, longer term investment with a highly attractive return”.
Under the scheme, Hammersmith and Fulham residents can put money into the fund, which is being used by the council to invest in a range of eco-initiatives, for five years. Over that period they will receive a fixed return of 4.6% interest a year, to be paid on a six-monthly basis.
The first round, launched in November last year and ending earlier this month, met its £1m target with funding from more than 850 investors. Cllr Ree told the Local Democracy Reporting Service (LDRS), “I was delighted that we were able to hit our £1m fundraising target ahead of time, and am excited to move into the second tranche of the investment already. 864 individuals participated in the investment – more than any other area where this has been tried before.
“This shows the scale of concerns for our local environment and the confidence residents have in the scheme.”
Some of the money from round one is already being put to work, with projects including the introduction of 500 new cycle hangars and expanding the borough’s sustainable drainage network. It is hoped over various rounds the scheme will raise £5m.
Cllr Ree said councils such as Westminster and Camden have run similar programmes, but never on this scale.
“We know that residents are concerned about the impact of climate change on our borough, and the council shares these concerns,” Cllr Ree said. “That is why we made the ambitious commitment to achieve net-zero carbon emissions. Achieving this will require new investment in climate action, but also new ways of raising the funds to pay for it.
“The H&F Green Investment is the UK’s largest ever climate investment scheme of its kind, looking to raise up to £5m for local climate projects – far more than anything that has come before. The council is constantly looking to reform to provide services in the most efficient and effective way possible, and this is the sort of innovative scheme that will help us make a real change to the borough and a real difference to people’s lives.”
The next round of funding, for which the council has also set a £1m target, could help with projects including a new community garden in Frank Banfield Park, extending green verges along New King’s Road in Fulham, and restoring the wildlife pond in Ravenscourt Park. It will also contribute to heating council-owned buildings via cleaner, more environmentally-friendly methods, such as using solar panels and heat pumps. Residents have until May 27 to invest.
It comes as councils increasingly look for alternative ways to up their income, with rising social care and homelessness costs and reduced funding from central Government hitting finances. Hammersmith and Fulham Council, while warning of growing financial pressures, has put forward a balanced budget for 2024/25, due to go before Full Council this Wednesday (28 February).
As with all investments, there is an element of risk to those putting money into the scheme. However, the council says that local authorities, unlike companies, cannot be declared bankrupt to avoid paying back debts. “This means that no UK council has ever failed to pay back an ordinary loan,” a council webpage on the Green Investment reads.
Cllr Ree said of the launch of the second phase, “This scheme offers a rare win-win-win: With residents being able to access a low risk, long term investment with a highly attractive return; the council able to borrow for these important projects at a more competitive rate than we would otherwise be able to; and most importantly, a win for our local environment, with the investment greening our borough and supporting vital climate action.”
Ben Lynch - Local Democracy Reporter