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Decision details

Treasury Management Strategy Statement 2023/24

Decision Maker: Cabinet

Decision status: Approved

Is Key decision?: No

Is subject to call in?: Yes

Purpose:

The Chartered Institute of Public Finance and Accountancy’s Treasury Management in the Public Services: Code of Practice 2017 Edition (the CIPFA Code) requires the Authority to approve a treasury management strategy before the start of each financial year.


This report fulfils the Council’s legal obligation under the Local Government Act to have regard to the CIPFA Code.

Decision:

(1)  To recommend the actions proposed within the Treasury Management Strategy Statement (Appendix 1 of the report) to February Council.

(2)  To note the Treasury Management Indicators detailed in Appendix 1 of the report.

(3)  To recommend Council to approve the adoption of the Treasury Management Clauses (Appendix 3 of the report).

(4)  To note the Treasury Management Indicators detailed in Appendix 1 of the report and to delegate authority for updating the indicators prior to approval at Full Council on 21st February 2023 to the Chief Finance Officer and Cabinet Member for Resources, in light of any changes to the recommended budget as set out in the Budget Report.

(5)  To note that any comments made by the Corporate Audit Committee at their meeting on 7th February 2023 will be reported to Full Council on the 21st February 2023. 

Reasons for the decision:

To ensure that the Council’s investment plans are affordable, prudent and sustainable.  The suggested strategy for 2023-24 is based on the Treasury Officers’ views on interest rates, supplemented with leading market forecasts provided by the Council’s treasury advisor, Arlingclose.  The report fulfils the Authority’s legal obligation under the Local Government Act 2003 to have regard to the CIPFA Code.

Alternative options considered:

The Chief Financial Officer, having consulted the Cabinet Member for Resources, believes that the proposed strategy represents an appropriate balance between risk management and cost effectiveness.  Some alternative strategies, with their financial and risk management implications, are set out in the table below.

Alternative

Impact on income and expenditure

Impact on risk management

Invest in a narrower range of counterparties and/or for shorter times.

Interest income will be lower.

Lower chance of losses from credit related defaults, but any such losses may be greater.

Invest in a wider range of counterparties and/or for longer times.

Interest income will be higher.

Increased risk of losses from credit related defaults, but any such losses may be smaller.

Borrow additional sums at long-term fixed interest rates.

Debt interest costs will rise; this is unlikely to be offset by higher investment income.

Higher investment balance leading to a higher impact in the event of a default; however long-term interest costs may be more certain.

Borrow short-term or variable loans instead of long-term fixed rates.

Debt interest costs will initially be lower.

Increases in debt interest costs will be broadly offset by rising investment income in the medium term, but long-term costs may be less certain.

Reduce level of borrowing.

Saving on debt interest is likely to exceed lost investment income.

Reduced investment balance leading to a lower impact in the event of a default; however long-term interest costs may be less certain.

 

Report author: Jamie Whittard

Publication date: 10/02/2023

Date of decision: 09/02/2023

Decided at meeting: 09/02/2023 - Cabinet

Effective from: 18/02/2023

Accompanying Documents: