Issue - meetings

The Leader’s Portfolio

To consider report FIN/512 of the Head of Corporate Finance, which was referred to the meeting of the Overview and Scrutiny Commission held on 23 November 2020.

RESOLVED

That the Cabinet notes the report and the treasury activity for the first two quarters of 2020/2021

Reasons for the Recommendations

The CIPFA (Chartered Institute of Public Finance and Accountancy) Code of Practice for Treasury Management recommends that members be updated on treasury management activities regularly (Treasury Management Strategy Statement, annual and mid-year reports).  This report, therefore, ensures this Council is implementing best practice in accordance with the Code.

The Leader presented report FIN/512 of the Head of Corporate Finance which provided an update on the Council’s Treasury Management Strategy for the first two quarters of 2020/2021. The report detailed that due to the current economic climate the income being generated by our investments were extremely low compared to our recent investment peak of generating £6mil a year. The Leader emphasised that the income gained by its investment was used as revenue to support services. It was noted that the Council prioritises its investments as being security of capital, liquidity, yield and ethical.

Councillor T Belben presented the Overview and Scrutiny Commission’s comments on the report to the Cabinet following consideration of the matter at its meeting on 23 November 2020, which included seeking clarity over why the Council had invested at 0%, which was explained that it took place where the Council had reason to invest for relatively short periods of time to for a flexibility when seeking better opportunities.

Councillor Crow also spoke on the report in doing so acknowledging the difficulty of the investment market at present and the subsequent impact on the Council’s yield as a result.

A recorded vote was taken on the recommendations in accordance with the Council’s Virtual Committee Procedure Rules.  The names of the Councillors voting for and against the recommendations, along with any abstentions, are recorded as set out below:

For the recommendations:

Councillors Irvine, Jhans, Lamb, Mullins, and P Smith. (5)

Against the recommendations:

None.

Abstentions:

None.

RESOLVED

That the Cabinet notes the report and the treasury activity for the first two quarters of 2020/2021

Reasons for the Recommendations

The CIPFA (Chartered Institute of Public Finance and Accountancy) Code of Practice for Treasury Management recommends that members be updated on treasury management activities regularly (Treasury Management Strategy Statement, annual and mid-year reports).  This report, therefore, ensures this Council is implementing best practice in accordance with the Code.

To consider report FIN/512 of the Head of Corporate Finance.

The Commission considered report FIN/512 with the Leader of the Council, Head of Corporate Finance and Chief Accountant which provided an update on the Council’s Treasury Management Strategy for the first two quarters of 2020/2021.  The Council prioritises its investments as being security of capital, liquidity and yield.

Councillors made the following comments:

·       The Commission received clarification on a number of points within the report.  In terms of detailed holdings, it was confirmed that Leeds building society was a covered bond, backed by a secure government bond and thus attributed the AAA rating.

·       Recognition that investing at 0% had taken place where the council had reason to invest for relatively short periods of time.

·       Confirmation that investments with banks offered a higher risk during the pandemic and lower rates at the present time than investments with local authorities.

·       Confirmation that appendix 1 included the overall weighted average for the portfolio of detailed holdings.

·       Queries sought and obtained regarding details within appendix 2.

RESOLVED

That the Commission notes the report and requests that the views expressed during the debate, are fed back to the Cabinet through the Commission’s Comment sheet.