A lucrative £86million fund owned by Plymouth City Council lays in the hands of wealthy banks and investment firms, it can be revealed.

Balance sheets show how millions of pounds in local authority investment is spread across an array of UK accounts, most of which is steadily making tidy amounts of interest.

Data provided to Plymouth Live under the Freedom of Information Act shows how and where the council squirrels away the huge pile of money.

The council, as of March 31, 2018, had investments totalling £86,135,157, with specialist banks, investors and bond companies all getting a piece of the pie.

The biggest chunk - £26.12million - is stashed in a Money Market Fund; which yield bigger returns than bank deposits.

Westminster investment moguls CCLA holds close to £30million between two accounts which pumped out - as of March this year - returns of 3.8 per cent and 3.15 per cent.

The council has £86million in assets tucked away in a pile of high interest accounts

South Africa-based 'asset management' group by the name of Investec keeps around £3million safe - whilst US investors Federated locks away just over £2million, churning out a 0.52 per cent interest rate.

Common high-street banks like Santander, Barclays, HSBC, Lloyds and Leeds Building Society also hold vast sums between them.

Burying the fortune - a mix of reserves separate to the council's day-to-day budgets - helps bolster Plymouth's purse strings, ensures the city can pay for local services long term and protects the council should things go drastically wrong.

Some accounts are more accessible than others, with inevitable lock-down features on those which yield bigger sums.

The statistics are made up of long-term and short-term investments and 'cash and cash equivalents' - real cash that's not been deposited.

Scroll through the graphs below which help to unravel Plymouth's finances.

Plymouth's finance machine: How does it all work?

It's a publicly funded organisation that has to act hard and fast like a well oiled business machine.

Plymouth City Council has a small team of experts that are tasked with constantly scrutinising which banks command the best interest deals.

The treasury management service and a small team of external advisors work to identify if there are deals the authority's not capitalising on.

That enables the authority to make key decisions that could mean big things for the city's future - like piling £10million into the accounts of a company that can cough up millions in return.

Millions that can be used to plug holes in budgets or pay for services to continue, says Plymouth Labour money mogul Mark Lowry.

Cllr Mark Lowry is now in charge of the city's finances
Cllr Mark Lowry is now in charge of the city's finances

"Money that's sat in the bank is being invested," Cllr Lowry said.

"It will be required at some stage to pay the bills, so I can't use it on an old spend - we can only spend it on things now."

Plymouth's new Labour administration has been tasked with driving down a £2.4million overspend in its budget.

But piles of cash in the banks can't be used to plug the black hole, Cllr Lowry said.

"If you haven't got enough money to pay your mortgage, what do you do - do you go to the bank and borrow more money?

"You can't do do that. The bank manager would say no.

"Within treasury management; you get money from the Government. Let's say you have got to pay for something, you get £10million but it's not needed for another year.

"Rather it being sat in an account with 0.5 per cent interest, you put it in a high interest bank account and make some cost.

"That goes back into the revenue budget to pay for services.

"In treasury management, we've made £1.3million in interest. We use that to pay for our overspend; and that too makes interest."

The 2008 banking crisis, an end to foreign deals - and the £13million Iceland payday

Plymouth - and its finances - has gone through a lot of change

The latest treasury management accounts suggest all of Plymouth's investments have now been moved back to Britain - 10 years after the banking crisis threatened to tear up the council's foreign cashflow.

In 2008, Plymouth had £13million invested with failed Icelandic banks Heritable, Glitnir and Landsbanki – money which had been frozen, prompting fears it would never return.

Councillors at the time were poised to back a call from Kent County Council asking the Government to guarantee council investments in British banks.

At £50million, Kent was the biggest council investor in Iceland and had written to the Chancellor asking for government assurances.

In the current financial climate, guaranteed deposits in British banks would provide a “safe haven” for council money, while also increasing liquidity in the banking system, said Cllr Ian Bowyer, then cabinet member for budget and asset management.

“It’s a win-win situation,” said Cllr Bowyer. “We need deposits to be guaranteed but we’d be bringing much-needed money into the British banking system as well as ensuring its safety.”

The mammoth international deals

How Plymouth Live's Edd Moore broke the news in 2008
How Plymouth Live's Edd Moore broke the news in 2008

In 2008, the council had more than £282million invested in banks worldwide, of which 30 per cent was offshore.

The Herald at the time exclusively revealed the names of all the countries where the dough was sat.

The financial position - as of 2008

Australia - £11m

Germany - £2.8m

Iceland - £14m

Ireland - £42.3m

Saudi Arabia - £8.5m

Belgium/Luxembourg France - £5.7m

UK banks - £90m

UK building societies - £107m

That's now all changed as there's no more evidence to show investments outside of the UK remain.

Plymouth has also finally recouped the last of its cash from Iceland - and made almost a £1million in interest off the back of it.

Did you know?

The council also holds £69.9 million of investments in directly-owned property and loans to Plymouth businesses - £28.5 million up on the previous year.

The return on the latter investments is higher but the risks greater.

The council's total debt was £483 million at the end of 2017/18, up £83 million. The figure includes £125 million of liabilities, such as those accrued through private finance initiative schemes.

The debt is below the maximum amount a local authority can legally borrow, in Plymouth City Council’s case now calculated at £610 million.

Refinancing reduced the amount owed to banks by £11 million during the year, and the report says further refinancing deals are being pursued.

As reported earlier this year, a report presented to the council’s audit committee said: "In March 2017, the Icelandic authorities lifted the restriction on movement of monies from the country and in June 2017 the council received its final payment.”

As well as the £13 million original claim, the council received £900,000 in interest on the money it had invested in the failed banks.