Issue - meetings

To provide pre-decision scrutiny to the treasury documents being proposed (report of the Director of Finance (S151) enclosed).

The Head of Finance Delivery introduced the Draft Treasury Management Policy Statement, the Draft Treasury Management Strategy Statement, the Minimum Revenue Provision Policy Statement and the Annual Investment Strategy 2026/27, together with the Treasury Management and Investment Management (Non-Treasury) Principles and Practices.

Members were advised that the items represented core elements of the Council’s governance framework and formed part of the wider budget setting process.

The Committee was informed that the Treasury Management Policy Statement remained unchanged, while the supporting strategies set out proposed prudential indicators, borrowing requirements, investment priorities and capital financing expectations for the next five years.

The officer summarised key sections of the appendices, including capital expenditure forecasts, the capital financing requirement, borrowing limits, interest rate forecasts, minimum revenue provision methodology and the annual investment strategy. The Committee was invited to comment prior to referral of the documents to Cabinet and Council.

The report was considered and the following issues raised:

·       Members asked whether the Council was fully compliant with the Prudential Code, the CIPFA Treasury Management Code and statutory borrowing and investment limits.

o   Officers confirmed that the Council was compliant in all respects.

·       Members queried how treasury and non?treasury risks were identified and monitored.

o   The Director of Finance (S151) advised that risk management was fluid, regularly reviewed and supported by layered controls that ensured a robust oversight framework.

·       Members sought clarification on counterparty and credit?rating controls, asking how downgrades were managed in practice.

o   The Director of Finance (S151) explained that investments were only placed with approved counterparties; however, if a counterparty was downgraded after an investment had been placed, the Council would manage the position to maturity or withdraw funds promptly where possible, depending on the investment type.

·       Members asked whether cashflow forecasts demonstrated sufficient liquidity under both normal and stressed conditions.

o   The Director of Finance (S151) confirmed that cashflow was monitored continuously, with modelling undertaken for stressed scenarios and with borrowing assumptions adjusted according to capital?spending profiles.

·       Members sought assurance that all borrowing was supported by business cases, capital?programme requirements and affordability assessments.

o   The Director of Finance (S151) confirmed that all borrowing followed the approved governance framework and affordability tests.

·       Members asked about the Council’s non?treasury loan exposure, including loans to Welland Homes and South Holland Local Housing Company.

o   The Director of Finance (S151) confirmed that the exposure remained within approved limits and proportionate to resources, with further investment to be monitored to avoid over?exposure.

·       Members asked whether any breaches of limits or Treasury Management Practices had occurred.

o   The Head of Finance Delivery advised that no breaches had occurred in 2024/25 and that any previous breaches had been reported to Members at the time.

·       Members queried whether more than one PSPS officer received credit?rating alerts to avoid reliance on a single individual.

o   The Head of Finance Delivery confirmed that alerts were received by multiple team members.

·       Members asked whether iTraxx crossover index rules affected treasury processes.

o   The Head of  ...  view the full minutes text for item 41