Issue - meetings

Members considered a report setting out the proposed Treasury Management and Annual Investment Strategy for 2020 – 21, including prudential indicators. 

Councillor Williamson presented the report, referring to the importance of ensuring security, liquidity and yield were managed appropriately.  He explained the main points of the report, which had been considered by the Performance, Audit and Governance Oversight Committee, which had had no objections.  He commended the Strategy to Members and proposed a motion supporting the recommendation. 

Councillor Andrews seconded the motion. 

Councillor Goldspink asked whether the Council had investments in companies linked to fossil fuels or authoritarian regimes. 

Councillor Williamson said the Council had no investments in companies, and the current investment portfolio included an investment with a Bank Green Deposit scheme.  He would provide further information in response to the question. 

The motion being put to the meeting, a recorded vote was taken, in accordance with the legislative requirement, the results being:

FOR

Councillors Alder, Andrews, Beckett, Bell, Bolton, E Buckmaster, R Buckmaster, Bull, Burmicz, Corpe, Crystall, Curtis, Crofton, Cutting, Deering, Drake, Dumont, Fernando, Frecknall, Goldspink, Goodeve, Hall, Haysey, Huggins, Jones, Kemp, McAndrew, Newton, Page, Pope, Redfern, Reed, Ruffles, Snowdon, Stowe, Symonds, Ward-Booth, Williamson, Wilson, Wyllie.

AGAINST

None.

ABSTENTIONS

Councillors Brady and Kaye.

For:  40

Against:  0

Abstentions:  2

The motion was declared CARRIED. 

RESOLVED – that (A) the Treasury Management Strategy 2020-21, including the prudential indicators, discussed in paragraph 3.6 of the report, be approved; and

(B)   the credit and counterparty risk management and approved countries list, discussed in paragraph 3.7 of the report, be approved.

To recommend to Council that

(a) the Treasury Management Strategy and Annual Investment Strategy set out at Appendix A, including the prudential indicators discussed in paragraphs 3.6 of the report, be approved; and

(b)The credit and counterparty risk management and approved countries list discussed in paragraph 3.7 of the report be approved.

The Executive considered a report setting out the proposed Treasury Management and Annual Investment Strategy 2020/21. 

Councillor Williamson, presenting the report, said the report aimed to ensure the Council’s cash flow was adequately planned, that capital plans were funded, and to provide for security of sums invested.  The primary concern was that there be no loss of capital, and that maximum yield would be sought only as long as the investment was secure and matched the investment requirements. 

Councillor Williamson highlighted further points set out in the report, including the fact that the Council had an interest rate of 3.5% for invested reserves, and that the Financial Sustainability Committee had acquired one property and would receive an additional allocation in the next year.  There was no over reliance on one source of income.  He referred to prudential indicators and to an updated version of the core funds and expected investment balances table in appendix A, to reflect a correction.  He confirmed this correction had been identified before the meeting of the Performance, Audit and Governance Oversight Committee, and that it did not change the prediction. 

Councillor Williamson proposed and Councillor McAndrew seconded, a motion to support the recommendations in the report.  The motion being put to the meeting, and a vote taken, it was declared CARRIED.

RECOMMENDED - that (A) the Treasury Management Strategy and Annual Investment Strategy set out at Appendix A, including the prudential indicators discussed in paragraphs 3.6 of the report, be approved; and

(B)   The credit and counterparty risk management and approved countries list discussed in paragraph 3.7 of the report be approved.

The Interim Head of Strategic Finance and Property and Section 151 Officer presented a summary of the report and submitted an amended table under the item Core Funds and Expected Investment Balances.  Whilst the Financial Sustainability Committee considered the acquisition of additional buildings, building investments were relatively small and there was no over-reliance on commercial income. External advisers were also used and the Capital Strategy was similar to that of previous years.

In response to a question by the Chairman on details of “other long term liabilities”, the Interim Head of Strategic Finance and Property and Section 151 Officer BP said that he thought these were leases, but that he would check  and email the information to Members.

The Interim Head of Strategic Finance and Property and Section 151 Officer said there would only be borrowing as and when funds were needed, although there was a realistic possibility that no borrowing would be needed in the 2020/21 financial year. The cost of borrowing was included in the MTFP and but business cases on capital schemes allowed for interest.

The Interim Head of Strategic Finance and Property and Section 151 Officer that the Council had appointed Link Asset Services as its treasury advisor and part of their service was to assist the Council in formulating a view on interest rates. There were numerous variables which could influence interest rates and forecasts were largely based on assumptions.

With reference to counterparties, the Chairman enquired if banks should not be named. The Interim Head of Strategic Finance and Property and Section 151 Officer said that this was not necessary; the options were based on credit ratings and by not naming banks specifically, it avoided having to make amendments to the strategy at a later stage. The strategy as presented therefore gives that flexibility.

Councillor A Curtis moved and Councillor A Alder seconded, a motion that the Committee endorses that the Executive considers the recommendations in the report for recommendation to Council.

After being put to the meeting and a vote taken, the motion was declared CARRIED.

RESOLVED  - to endorse that the Executive considers the following for recommendation to Council: that the (a) Treasury Management Strategy and Annual Investment Strategy in Appendix ‘A’, including the prudential indicators discussed in paragraphs 3.6 be approved and (b) credit and counterparty risk management and approved countries list discussed in paragraph 3.7 be approved.