Issue - meetings

Mid term Treasury Report 2019/20

Meeting: 14/11/2019 - Governance and Audit Committee (Item 25)

25 Mid term Treasury Report 2019/20 pdf icon PDF 68 KB

To provide an update of the treasury management position of the Council as at 30 September 2019 (report of the Executive Director Commercialisation (S151 Officer) enclosed).

Additional documents:

Minutes:

Consideration was given to the report of the Executive Director Commercialisation (S151 Officer), which provided an update of the treasury management position of the Council as at 30 September 2019.

 

In December 2017, the Chartered Institute of Public Finance and Accountancy (CIPFA), issued revised Prudential and Treasury Management Codes.  As from 2019/20, all local authorities would be required to prepare a Capital Strategy which was intended to provide the following:

 

·         A high-level overview of how capital expenditure, capital financing and treasury management activity contributed to the provision of services;

·         An overview of how the associated risk was managed;

·         The implications for future financial sustainability.

 

A report setting out the Authority’s Capital Strategy was taken to full Council as part of the budget setting report on 27 February 2019.

 

The mid year report had been prepared in compliance with CIPFA’s Code of Practice on Treasury Management, and covered the following:

 

·         An economic update for the 2019/20 financial year to 30 September 2019;

·         A review of the Treasury Management Strategy Statement and Annual Investment Strategy;

·         The Council’s capital expenditure, as set out in the capital strategy and prudential indicators;

·         A review of the Council’s investment portfolio for 2019/20;

·         A review of the Council’s borrowing strategy for 2019/20;

·         A review of any debt rescheduling undertaken during 2019/20;

·         A review of compliance with Treasury and Prudential Limits for 2019/20

 

The following issues were raised:

 

·         The Public Works Loan Board had recently announced an increase of 1% on all new borrowing – was this still an attractive deal?

o   Officers responded that all borrowing rates needed to be assessed.  When a capital project was being considered, a full option appraisal should be carried out to ascertain the most cost effective way of financing that expenditure. 

 

·         The Portfolio Holder Finance stated that the UK Municipal Bonds Agency, with whom the Authority held a stake for a period of 3 years, were not performing as well as they should.  It was agreed that a report be provided to the Committee within the next 5-6 months to provide an update on the situation.

 

AGREED:

 

a)    That the report, the treasury activity as detailed in Appendix A and the economic update from Link Asset Services at Appendix B be approved;

 

b)    That the amendment to the Treasury Management Strategy Statement to add Parish Councils in the table of ‘Non-Specified Investments with Maturities in Excess of 1 Year’, as detailed in Paragraph 1.6, be approved; and

 

c)      That an update report be provided to the Panel within the next 6 months providing an update on the performance of the UK Municipal Bonds Agency, with whom the Authority held an equity stake.