Issue - meetings

To receive a report of the Executive Member for Finance.

The Executive Member for Finance submitted a report seeking changes to the Council’s Investment Strategy.  He provided Members with the background to the current position that had been reached since Council had approved the Treasury Management Strategy in February 2012 (Minute 620 refers).

Councillor D Andrews referred to the informal investment board meetings and suggested that the Chairman of Corporate Business Scrutiny Committee should be invited to attend as an observer.  The Executive Member had no objections to this suggestion and referred to the expertise that was available.

Councillor T Page asked whether in view of the Royal Bank of Scotland being implicated in the LIBOR rate-fixing scandal, it was appropriate for the Council to increase its investments with its banks.  He asked whether the reward of investing with “A” rated banks instead of “AA” rated banks balanced the risk.  He also asked whether it was more appropriate for the informal board meetings to be formalised.  He further asked what role Sector, the Council’s advisers played in respect of the investment board.  Finally, he asked whether the Officer with overall responsibility for the Council’s investments was employed full-time.

In reply, the Executive Member stated that the LIBOR scandal was a regulatory issue and therefore had no impact on his proposal.  He commented that the ratings of the banks had changed, but that he was not proposing changing banks for investment purposes.  In respect of the investment board, he believed that the current arrangements worked well and that it would not be appropriate for highly confidential discussions to be minuted.  The board received professional advice from Sector, who attended the meetings.  Finally, the Executive Member confirmed that the Council’s Section 151 Officer was a full-time employee.

Council approved the proposals as now detailed.

RESOLVED – that (A) counterparty investment limits for Lloyds and Nat West be increased to £20m with immediate effect;

(B)      a minimum credit rating of “A” be applied for investments of up to 2 years with UK banks; and

(C)      the Executive Member for Finance be given delegated authority to vary the Council’s investment strategy (as a matter of urgency) in agreement with the Leader, the Chairman of the Audit Committee and the Director of Internal Services and to report the changes to the Council.