UP to �2million in capital cash balances currently held by the region's eight common good funds are set to be transferred to a private firm of global fund managers.

It follows the news that the cost of running the funds has exceeded investment income for a second successive year.

The move is set to be endorsed by Scottish Borders Council, which administers the funds on behalf of the eight communities, when it meets on August 29.

It comes after another year of underperformance by funds which were set up centuries ago by the Scottish crown when common lands were granted to local burgesses and freemen.

The funds have evolved, alongside other philanthropic trusts, to provide financial help in towns and villages towards such facilities as parks and libraries along with grants to community groups.

Since SBC's inception in 1996, disbursement and investment decisions relating to the funds in Selkirk, Lauder, Galashiels, Hawick, Jedburgh, Kelso, Peebles and Duns have been made by local working groups, comprising ward councillors.

But a year after the 2008 banking crash, which saw the base rate tumble and returns dwindle, former Tory councillor Caroline Riddell-Carre called for the resources of the funds to the pooled and embraced in a single investment strategy (SIS).

Some working groups baulked at the prospect of their towns losing local control, but after protracted horse trading, SBC finally approved the strategy at the end of 2011.

At the time, SBS said the SIS, which would apply to the investment of surplus capital cash balances and not fixed assets like property, would "improve long-term capital and income growth".

And the following assurance was offered: "The strategy�will ensure common good and trust funds retain their individual identities. There will be no change to local member involvement [in working groups]�for the management of revenue cash balances or the disbursement of grants." In order implement the strategy, an all-party Common Good Investment Working Group (CGIWG) was set up by the council.

But in 2012, lack of progress towards implementation prompted former SBC leader Drew Tulley to aver that SBC "should hang its head in shame".

And in April this year, a member of the working group, Conservative councillor Gavin Logan, broke ranks and claimed the delays in implementing the SIS were "unacceptable" and were depriving the funds of much-needed cash.

Last month, SBC's unaudited accounts for 2012/13 revealed that the eight funds, which have combined net assets totalling �9.84million, attracted investment income of just �46,000.

That was actually �9,000 LESS than the cost of administering the funds which, at �55,000, was the same as the previous year when income from investments was only �36,000.

SBC's chief financial officer David Robertson this week confirmed that the single investment strategy was about to be implemented and that a recommendation on who should manage it had been made by the CGIWG.

Asked why it had taken four years, he told the Border Telegraph: "The important process of appointing the manager for the common good funds has been delayed by a number of competing work priorities for key members of staff." Mr Robertson went on: "We have now been through the process to procure a new manager, assisted by our independent financial adviser AON Hewitt, and are now in a position to make a recommendation to elected members.

"I anticipate the full council will ratify this decision on August 29 having considered my report and we can then quickly move to transfer capital cash balances from deposit accounts with the intention of improving investment returns.

"It is worth noting that several of the common good funds have significant property holdings which are not covered by the strategy. The most we will be able to actually place with the manager for investment purposes is probably around �1.5million to �2million per annum.

"The new manager is a highly respected global fund management firm and has no connection with the council.

"We are not in a position to name the firm just yet, pending consideration of the report [on August 29] which recommends the appointment." The council's accounts reveal that, in 2012/13, disbursements from common good funds to their communities totalled �134,000, up from �100,000 in the previous year.

The list of assets and disbursements for common good funds (figures for 2011/12 in brackets) is as follows: Selkirk �2.336million (�2.395million), disbursements �18,000 (�10,000); Lauder �1.031million (�943,000), �2,000 (nil); Jedburgh �1.371million (�1.353million), �56,000 (�19,000); Hawick �3.032million (�3.016million), �27,000 (�12,000); Kelso �950,000 (�971,000), �1,000 (nil); Peebles �1.063million (�1.069million), �32,000 (�59,000); Galashiels �26,000 (�24,000), nil (nil); and Duns �30,000 (�33,000), nil (nil).

The council also administers over 200 trust funds. At the end of 2012/13, their combined value stood at �3.432million, down �7,000 on the year.