Issue - meetings

The Executive considered a report proposing an amendment to the Council’s Treasury Management Strategy.  The Leader had agreed to accept this item onto the agenda as a matter of urgency, in order to avoid delay in considering possible changes to the Strategy before setting the budget for 2011/12.  Consideration of the matter now would also provide an opportunity to take advantage of options that had been the subject of recent discussions with Sector, the Council’s investment advisers.

The Executive noted that investment income in 2010/11 was forecast to be some £850k below budget and this reduced return was reflected in the Medium Term Financial Plan. Discussions with Sector on options to improve returns had identified the use of structured medium fixed term deposits as a means to achieve improved returns.  This option required the Council to reconsider the balance between risk and returns. 

The Director of Internal Services provided a verbal update on the deliberations of the Corporate Business Scrutiny Committee, which had considered this matter at its meeting held on 30 November 2010.  The Director advised that the Committee, whilst having some reservations, had supported the proposed amendment.

The Director advised that the preferred option would be to use medium fixed term deposits with major UK banks in tranches of up to £10m.

The Executive considered the balance between risk and probable returns and agreed to support the proposal as now detailed.

RECOMMENDED – that an amendment to the Treasury Management Strategy to permit in house investment in medium fixed term deposits, as detailed at paragraphs 2.4 – 2.6 of the report submitted, be approved.