Issue - meetings

To consider and recommend to Council the approval of the 2017/18 Treasury Management Strategy.

RECOMMENDS

That the Council approve:

  i.  the Treasury Management Policy, as detailed in Appendix 2 of the submitted report;

  ii.  the Treasury Management Strategy, as detailed in Appendix 3 of the submitted report;

  iii.  the Prudential, Treasury Management and Commercial Investment Strategy Indicators, as detailed in Appendix 4 of the submitted report; and

  iv.  the Annual Minimum Revenue Provision Policy 2017/18, as detailed in Appendix 5 of the submitted report.

By way of a report from the Head of Resources (a copy of which is appended in the Minute Book) presented in conjunction with the Executive Councillor for Strategic Resources, the Cabinet was presented with the Treasury Management Strategy (TMS).

The Council was required by law to approve, on an annual basis a TMS.  This requirement was enshrined within relevant Codes of Practice issued by the Chartered Institute of Public Finance and Accountancy (CIPFA) and other guidance issued by central government.

The aim of the TMS was to manage the Council’s investments, cash flows, banking, money market and capital market transactions, loans and borrowings within the requirements of an effective control environment whilst in pursuit of optimum performance and yield, and at the same time managing the risk.

The Cabinet were referred to Appendix 5 of the report and it was explained that the TMS included the Minimum Revenue Provision (MRP) Policy, the charge to revenue for the repayment of debt, and included the different MRP approaches for the general capital programme, loans to organisations, and the Commercial Investment Strategy (CIS).

For 2017/18 a new MRP policy had been introduced which would be used where maturity loans had been used to finance expenditure on the CIS.

In response to a question it was explained that discussions with the Council’s External Auditors, who reported to the Corporate Governance Committee, were on-going regarding the new MRP policy and that the model used was similar to that of other local authorities. 

Having considered the comments of the Overview and Scrutiny Panel (Performance and Customers) which had been circulated to the Cabinet separate to the agenda, the Panel meeting having occurred following the agenda publication, the Cabinet

RESOLVED

That the Council be recommended to approve:

 i.  the Treasury Management Policy, as detailed in Appendix 2 of the submitted report;

ii.  the Treasury Management Strategy, as detailed in Appendix 3 of the submitted report;

iii.  the Prudential, Treasury Management and Commercial Investment Strategy Indicators, as detailed in Appendix 4 of the submitted report; and

iv.  the Annual Minimum Revenue Provision Policy 2017/18, as detailed in Appendix 5 of the submitted report.

The Treasury Management Strategy 2017/18 is to be presented to the Panel.

With the aid of a report by the Head of Resources (a copy of which is appended in the Minute Book) the Treasury Management Strategy 2017/18 was presented to the Panel. Members were informed that the report is very similar to the report presented to the Panel in the last Municipal Year and therefore Members decided to focus on the changes.

The Panel was informed that the Council has the ability to take out an interest only loan in order to purchase assets however the Council have not done this.

In response to the question of why doesn’t the Council take out loans now whilst interest rates are low, the Panel was informed that it is not prudent to borrow money if the Council does not make any investments. Members noted that the Council only purchased three commercial properties out of 57 the Council has reviewed.

(At 9.04pm, during the discussion of this item, Councillors R Fuller and R Harrison left the meeting and did not return.)