Issue - meetings

To consider a report by the Head of Financial Services reviewing performance for the period 1^st April to 30^th September 2010.

Noted the respective levels of performance achieved during the period April to September 2010 by external fund managers in the matter of the investment of the Council's capital receipts. 

A report by the Head of Financial Services was submitted (a copy of which is appended in the Minute Book) which reviewed the respective levels of performance achieved during the period April to September 2010 by external fund managers in the matter of the investment of the Council's capital receipts. 

RESOLVED

  that the contents of the report be noted.

To consider a report by the Head of Financial Services reviewing performance for the period 1^st April to 30^th September 2010.

(Councillor T V Rogers, Executive Councillor for Finance and Customer Services was in attendance for this item).

Consideration was given to a report by the Head of Financial Services (a copy of which is appended in the Minute Book) containing details of the Council’s Investments for the period 1^st April to 30^th September 2010.

By way of introduction, the Head of Financial Services reminded the Panel of the background to the introduction of enhanced arrangements for overseeing the management of the Council’s financial investments and borrowing. Members’ attention also was drawn to the strategic approach that had been adopted to the management of the District Council’s investments and recent changes to Public Works Loan Board loan rates, which had increased the cost to local authorities of long term borrowing by 0.85%. The Head of Financial Services also explained recent changes, which had been made to the definition used for fixed and variable rate investments and the resulting need to change the borrowing limits in order to maximise the flexibility available to the Council to react to changes in interest rates. The Panel supported the proposed change.

In discussing the content of the report and in noting that the latest forecast outturn predicted that there would be an increase in investment interest compared with the net budget, Councillor M F Shellens sought clarification as to how this had been achieved. In response, the Head of Financial Services explained that it was through a combination of factors including higher than anticipated interest rates, improved cash flow and changes in the mix of expenditure.

Members’ attention was drawn to a recent decision to invest with the Cambridge Building Society, which had enabled the Council to achieve a higher rate of return compared with other Building Societies for a short term investment. In response to a comment on the risks associated with investments in Building Societies, the Head of Financial Services informed Members that while some local authorities preferred to accept a lower return for complete security, a view had been taken that the securities offered by Building Societies were sufficient to minimise the risk to the Council associated with short term investments. Moreover, the funds invested were instantly available. Whereupon, it was

RESOLVED

that the Cabinet be requested to recommend the Council to note the contents of the report by the Head of Financial Services on Treasury Management – Review of Performance.