Agenda item

Report attached.

Councillor Joyce Plummer, Portfolio Holder for Resources, provided a report setting out the Council’s policy and objectives with respect to treasury management, to explain how it will achieve its objectives and manage its activities; and to agree an investment strategy for 2022/23 - 2024/25.

Councillor Plummer highlighted a number of key issues within the report, as follows:-

• The effective management of resources;
• Prudential indicators and limits;
• Borrowing;
• Loans; and
• Investment

The report had been prepared in line with the Chartered Institute of Public Finance and Accountancy (CIPFA) advice.

Approval of the report was not a key decision.

Reason for decision

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 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 this 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 and 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.  This 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 this report fulfilled those obligations.  CIPFA had published revised codes on 20^th December 2021 and had stated that formal adoption was not required until the 2023/24 financial year.

The report included detailed information on the following matters:-

• The Prudential Code and Prudential Indicators;
• Capital expenditure and the capital financing requirement;
• Minimum Revenue Provision (MRP);
• Affordability prudential indicators;
• Treasury Management Strategy 2022/23 - 2024/25;
• External debt overall limits;
• External v internal borrowing;
• Limits on activity;
• 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.

There were no alternative options for consideration or reasons

Resolved                                    -    That Cabinet recommends Council to:

(1)    Adopt the prudential indicators and limits detailed in the report;

(2)    Approve the Treasury Management Strategy, and associated indicators, as set out in section 8 of the report;

(3)    Approve the Investment Strategy as set out in section 13 of the report;

(4)    Approve that the Minimum Revenue Provision (MRP) for year 2022/23 – Appendix 1;

(5)    Approve the Treasury Management Policy Statement 2022/23 – Appendix 2

(6)    Approve the Treasury Management Practices Statement 2022/23 – Appendix 3

(7)    approve the Capital Strategy 2022/23 – Appendix 4