Issue - meetings

In February 2012, the Council adopted the revised CIPFA Treasury Management in Public services Code of Practice 2011 Edition, which requires the Council to approve a Treasury Management Strategy before the start of each financial year and for this to be scrutinised by an individual / group of individuals or committee.  In addition, the Department for Communities and Local Government (CLG) issued revised guidance on local authority investments in March 2010 that requires the Council to approve an investment strategy before the start of each financial year.

This report fulfils the Council’s legal obligation under the Local Government Act 2003 to have regard to both the CIPFA Code and the CLG Guidance. CIPFA issued an updated Treasury Management in Public Services: Code of Practice in late December 2017 and the code will be effective for the 2018/19 Financial Year.  In accordance with Arlingclose advice we have continued to seek approval of our Treasury Management Strategy (TMS) under the requirements of the 2011 Codes, not least because the new code does not recommend any changes to the format or content of the TMS. CIPFA is currently planning to publish updated guidance notes on the changes to the code later in 2018 and if any changes to this strategy are required they will be reported in future treasury management reports and further approvals will be sought at full council.

The Council considered a report seeking approval for the Treasury Management Strategy and the Investment Strategy.

On a motion from Councillor Charles Gerrish, seconded by Councillor Paul May, it was

RESOLVED

1.  To approve the actions proposed within the Treasury Management Strategy Statement as set out at Appendix 1 of the report;

2.  To approve the Investment Strategy as detailed in Appendix 2.

[Notes;

1.  The above resolution was carried with 1 abstention and all other Councillors voting in favour.]

In February 2012, the Council adopted the revised CIPFA Treasury Management in Public services Code of Practice 2011 Edition, which requires the Council to approve a Treasury Management Strategy before the start of each financial year and for this to be scrutinised by an individual / group of individuals or committee.

In addition, the Department for Communities and Local Government (CLG) issued revised guidance on local authority investments in March 2010 that requires the Council to approve an investment strategy before the start of each financial year.

This report fulfils the Council’s legal obligation under the Local Government Act 2003 to have regard to both the CIPFA Code and the CLG Guidance.

Councillor Paul Crossley made an ad-hoc statement where he had praised team of financial officers for their outstanding work in terms of managing Council’s investments and for giving priority to the security and liquidity of those investments.  Councillor Crossley expressed his concern down to increasingly uncertain times, such as Brexit, ‘Trump trade’ effect and to a high risk of conflict between some countries which would may have an impact on future investments, and asked the Cabinet to consider working with wider range of international banks.

Councillor Charles Gerrish replied that Council’s lending and borrowing list was regularly reviewed during the financial year and that credit ratings were monitored throughout the year.

Councillor Charles Gerrish introduced the report by saying that the Local Government Act 2003 requires the Council to ‘have regard to’ the Prudential Code and to set Treasury Indicators for the next three years to ensure that the Council’s capital investment plans are affordable, prudent and sustainable.  The Act therefore requires the Council to set out its treasury strategy for borrowing and to prepare an Investment Strategy; this sets out the Council’s policies for managing its investments and for giving priority to the security and liquidity of those investments.  The suggested strategy for 2018/19 in respect of the following aspects of the treasury management function was based on the Treasury Officers’ views on interest rates, supplemented with leading market forecasts provided by the Council’s treasury advisor, Arlingclose.

The Strategy Statement for 2017/18 set Treasury Indicators for 2017/18 – 2019/20, which included a total borrowing requirement at the end of 2017/18 of £308 million.  At the end of December 2017, external borrowing was at £176.9 million, which may increase before the end of the 2017/18 financial year should a review of the Council’s cashflow and capital investment decisions highlight additional borrowing was required. The level of borrowing was in line with the policy of utilising internal cash to reduce net borrowing costs and investment counterparty risk.

Councillor Charles Gerrish moved the recommendations.

Councillor Paul May seconded the motion by saying that he was pleased that all lending and borrowing transactions were within approved limits and with approved institutions. 

RESOLVED (unanimously) the Cabinet agreed to:

2.1  Recommend the actions proposed within the Treasury Management Strategy Statement (Appendix 1) to February Council.

2.2  Recommend the Investment Strategy as detailed in Appendix 2 to February Council.

2.3  Note the Treasury Management Indicators detailed in Appendix 1 and delegate authority for updating the indicators prior to approval at Full Council on 13th February 2018 to the Chief Finance Officer and Cabinet Member for Finance & Efficiency, in light of any changes to the recommended budget as set out in the Budget Report elsewhere on the agenda for this meeting.

2.4  Note that any comments made by the Corporate Audit Committee at their meeting on the 8th February 2018 will be reported to Full Council on 13th February 2018.