Agenda item

To consider the attached report and recommendations which were considered by the Cabinet on 12^th February 2020 and which are referred to Council for approval.

Councillor Joyce Plummer, Portfolio Holder for Resources, provided a report setting out proposals for the Council’s policy and objectives with respect to treasury management, to explain how it would achieve its objectives and manage its activities; and to agree an investment strategy for 2020/21.  The report had previously been considered by the Cabinet on 12^th February 2020 and its recommendations were referred to the Council for approval.

Treasury management was defined as:

• The management of the Council’s investment and cash flows, its banking, money market and capital market transactions;
• The effective control of the risks associated with these activities; and
• And the pursuit of optimum performance consistent with those risks.

The Council was required to operate a balanced budget which meant that cash raised during the year would meet cash expenditure.  Part of treasury management was to ensure the cash flow was properly planned with cash available when needed.  Surplus monies were invested in line with the Council’s low risk preferences.

The second function of treasury management was funding the Council’s capital plans.  The plans gave a guide to the future borrowing need of the Council.  The management of the longer term cash flow might involve arranging long or short term loans or using longer term cash flow surpluses.  Occasionally outstanding debt might be restructured to reduce Council risk or meet cost objectives.

The report had been prepared in line with the Treasury Management Code and Guidance (2017) written by The Chartered Institute of Public Finance & Accountancy (Cipfa).  In the case of local authorities in England and Wales, the Code was significant under the provisions of the Local Government Act 2003.  The Act required local authorities ‘to have regard (a) to such guidance as the Secretary of State may issue, and (b) to such other guidance as the Secretary of State may by regulations specify’.  The Local Authorities (Capital Finance and Accounting) (England) Regulations 2003 in paragraph 24 required local authorities to have regard to this guidance.  Acceptance of the report would fulfil those obligations.

The report included further details in respect of the following matters:

• The Prudential Code and Prudential Indicators;
• Capital Expenditure and the Capital Financing Requirement;
• Minimum Revenue Provision;
• Affordability Prudential Indicators;
• Treasury Management Strategy 2020/21 – 2022/23 (Current Treasury Position; Expected Movement in Interest Rates; Borrowing and Debt Strategy  2020/21 – 2022/23);
• External Debt Overall Limits;
• External v Internal Borrowing;
• Limits on Activity (Treasury Management Indicators; Proposed Limits for Maturity Structure of Borrowing);
• Debt Rescheduling;
• Investment Strategy;
• Treasury Management Practices (TMP);
• Policy on the Use of External Service Providers; and
• Treasury Management Strategy In-Year and Year-End Reporting.

Resolved                      -      That the Council agrees:

(1)   To adopt the Prudential Indicators and Limits detailed in the report.

(2)   To approve the Treasury Management Strategy, and associated indicators, as set out in Section 8 of the report.

(3)   To approve the Investment Strategy as set out in Section 13 of the report.

(4)   To approve that the Minimum Revenue Provision (MRP) for the year 2020/21 – Appendix 1.

(5)  To approve the Treasury Management Policy Statement 2020/21 – Appendix 2.

(6)  To approve the Treasury Management Practices Statement 2020/21 – Appendix 3.