Issue - meetings

Report of the Interim Director, Finance and Commercialisation detailing the context within which the Council’s treasury management activity operates and sets out a proposed strategy for the coming year in relation to the Council’s cash flow, investment and borrowing, and the management of the numerous risks related to this activity.

The report of the Interim Director Finance and Commercialisation was submitted detailing the context within which the Council’s treasury management activity operates and setting out a proposed strategy for the coming year in relation to the Council’s cash flow, investment and borrowing and the management of the numerous risks related to this activity. 

RESOLVED:

(i)  To approve the Council’s Treasury Strategy (TS) and Prudential Indicators for 2019/20 to 2022/23, as detailed within the report.

(ii)  To approve the 2019 Minimum Revenue Provision (MRP) Statement as detailed in paragraphs 106 to 115 and to delegate authority to the Chief Financial Officer (CFO) to approve any changes necessary that aid good financial management whilst maintaining a prudent approach.

(iii)  To approve the Investment Strategy as detailed in paragraphs 87 to 105 of the report.

(iv)  To note that at the time of writing this report the recommendations in the Capital update report, submitted to Council on the 20 February 2019, have not yet been approved.  The indicators in the report are based on the assumption that they will be approved, but should the recommendations change, the Prudential Indicators may have to be recalculated.

(v)  To continue to delegate authority to the Chief Financial Officer (CFO) to approve any changes to the Prudential Indicators, Minimum Revenue Provision or borrowing limits that will aid good treasury management. For example, agreeing an increase in the percentage for variable rate borrowing to take advantage of the depressed market for short term rates.  Any amendments will be reported as part of quarterly financial and performance monitoring and in revisions to the TM Strategy.

(vi)  To approve the proposal within the Capital Strategy report, that Governance Committee have delegated authority to approve future Treasury Strategy Reports and associated Prudential Indicators.

(vii)  To endorse the proposal to explore an alternative Treasury Strategy to generate additional income that can support local services, whilst maintaining a prudent approach.

Report of the Interim Director, Finance and Commercialisation detailing the context within which the Council’s treasury management activity operates and sets out a proposed strategy for the coming year in relation to the Council’s cash flow, investment and borrowing, and the management of the numerous risks related to this activity.

The Committee considered the report of the Section 151 Officer detailing the Treasury Management Strategy and Prudential Limits 2019/20 to 2022/23 and set out the context within which the Council’s treasury management activity operated, a proposed strategy for the coming year in relation to cash flow, investment and borrowing, and the management of the associated risks, including the loss of invested funds and the revenue effect of changing interest rates.  The Panel noted that Appendices 1 and 5 were new to the report as these were now a requirement of the CIPFA Code of Practice for Treasury Management in the Public Services.

The Committee particularly noted that moving forward Governance Committee would be responsible for approving the Treasury Management Report and its updates opposed to recommending to Council for approval.  There was also a suggestion being discussed with Group Leaders that a cross party discussion group would be helpful if an alternative strategy needed to be developed.

The Committee also noted that currently within the Strategy there was no provision for anything such as a LATCO and parameters were being put in place for such things should they be pursued.

The Committee noted that the HRA Cap had been removed and there was a task and finish group in place to monitor this.  Existing schemes were required to operate within the gap they had been given and any new schemes would be reviewed by the task and finish group, would need to be self-funding and submitted to Governance Committee for sign off.

The Committee also noted that all Governance Committee Members would be required to attend Treasury Management training at the start of the Municipal Year given they would now be approving the Treasury Management Strategy going forward.

RESOLVED:

(i)  That the Treasury Strategy (TS) for 2019/20 as outlined in the report be endorsed;

(ii)  That the 2019 Minimum Revenue Provision (MRP) Statement as detailed in paragraphs 106 to 115 be endorsed;

(iii)  That the Investment Strategy (IS) as detailed in paragraphs 87 to 105 be endorsed;

(iv)  That the indicators as reported had been set on the assumption that the recommendations in the Capital update report would be approved by Council on 20^th February 2019 be noted.  Should the recommendations change the Prudential Indicators may have to be recalculated;

(v)  That due to timing of this report, changes may still be required following the finalisation of capital and revenue budgets and therefore any significant changes to this report would be highlighted in the final version that was presented to Council;

(vi)  That the proposal within the Capital Strategy report, that Governance Committee has delegated authority to approve future Treasury Strategy Reports and associated Prudential Indicators be endorsed; and

(vii)  That the proposal to explore an alternative Treasury Strategy to generate additional income that could support local services whilst maintaining a prudent approach be endorsed.