Issue - meetings

To note the Treasury Management performance for the first 6 months of 2019/20 and recommend the report to Council for consideration.

 Executive Councillor: J A Gray.

The Cabinet has noted the treasury management performance for the first 6 months of 2019/20 and has recommended the report to Council for consideration.

With the assistance of a report by the Finance Manager (a copy of which is appended in the Minute Book) the Cabinet were updated on the Council’s treasury management activity for the first six months of the year, including investment and borrowing activity and treasury performance.

Best practice and prescribed treasury management guidance required that Members were informed in respect of treasury management activity. All treasury management activity undertaken during the first half of 2019/20 complied with the CIPFA Code of Practice and relevant legislative provisions.

In noting the comments of the Overview and Scrutiny Panel (Performance and Growth) and having commended Officers for their hard work and efforts in delivering the Commercial Investment Strategy, it was

RESOLVED

a)  to note the treasury management performance for the first 6 months of 2019/20; and

b)  to RECOMMEND the Treasury Management 6-month performance report to Council for consideration.

The Treasury Management Six Month Performance Review is to be presented to the Panel.

With the aid of a report by the Finance Manager (a copy of which is appended in the Minute Book) the Treasury Management Six Month Performance Review was presented to the Panel. For clarification, the Finance Manager confirmed that the total in table six is incorrect and informed Members of the correct total.

In response to a question on long term borrowing, the Executive Councillor for Resources stated that the borrow was predominantly for property purchases under the Commercial Investment Strategy (CIS). In addition, the Panel was informed that phase one of the CIS has drawn to a closed. Further discussion on the CIS continued and the Executive Councillor stated that the CIS has achieved what the Council set out to achieve in phase one and that the next phase is looking at what the Council can do beyond earning revenue for Council services. The Panel was interested to hear this and decided that this is an area of potential future investigation.

Members were informed that the Public Works Loan Board (PWLB) interest rate has increased which will have an impact upon other projects the Council are considering.

When asked about loans to other organisations, it was confirmed to the Panel that loans have been made to Luminus and Huntingdon Town Council, as well as smaller loans to other organisations.

A discussion ensued on the current CIS property values. It was recognised that this is a technical accounting exercise and what is shown is the current property values before new leases are negotiated and in place.

The Executive Councillor for Resources thanked the Finance Manager and her team in the preparation of the Treasury Management Review.

To note the Treasury Management performance for the first six months of 2018/19 and to recommend the report to Council for consideration.

(Executive Councillor: Councillor J A Gray).

Cabinet

Noted the Treasury Management performance for the first 6 months of 2018/19; and

RECOMMENDED

that the Treasury Management 6-month performance report be submitted to Council for consideration.

With the assistance of a report by the Head of Resources (a copy of which is appended in the Minute Book) the Cabinet were updated on the Council’s treasury management activity for the first six months of the year, including investment and borrowing activity and treasury performance.

Best practice and prescribed treasury management guidance required that Members were informed in respect of treasury management activity. All treasury management activity undertaken during the first half of 2018/19 complied with the CIPFA Code of Practice and relevant legislative provisions.

With regard to the performance of assets purchased as part of the Commercial Investment Strategy (Appendix E), it was reported that the decision made by the Cabinet at their Special meeting on 8th November 2018 was not captured within this report.

Having noted the comments of the Overview and Scrutiny Panel (Performance and Growth) at their meeting on 6 November 2018, it was reported that with the exception of the CCLA Property Fund the yields from all CIS investments were within or exceeding targeted returns of between 6-9%. Whereupon, it was

RESOLVED

a)  to note the treasury management performance for the first 6 months of 2018/19; and

b)  to RECOMMEND the Treasury Management 6-month performance report to Council for consideration.

The Treasury Management Six Month Performance Review is to be presented to the Panel.

With the aid of a report by the Head of Resources (a copy of which has been appended in the Minute Book) the Treasury Management Six Month Performance Review was presented to the Panel.

The key change since the last report was that the Bank of England base rate has increased which has made a difference to the rate of some loans the Council has.

A Member questioned the reasonableness of the 6-9% returns target on Commercial Investment Strategy (CIS) investments. The Panel was informed that the target is a guide and that a balance is struck between the risk of the investment and the return received. It was noted that the Council does have CIS investments which yield less than the target.

Following a question on only making investments within the District, Members were informed that the Council has sought extensive legal advice which confirmed that it can make CIS investments outside of the District boundaries; however there are greater tests to meet in order to demonstrate that the investment is worthwhile.

(At 7.55pm, during the consideration of this item, Councillor J M Palmer left the meeting and did not return.)