Issue - meetings

The Leader’s Portfolio

To consider report FIN/517 of the Head of Corporate Finance, which was referred to the meeting of the Overview and Scrutiny Commission held on 1 February 2021.

RESOLVED

That Full Council be recommended to approve the following items:

a)     the Treasury Prudential Indicators and the Minimum Revenue Provision (MRP) Statement contained within Section 5 of report FIN/517;

b)     the Treasury Management Strategy contained within Section 6 of report FIN/517;

c)     the Investment Strategy contained within Section 7 of report FIN/517;

Reasons for the Recommendations

The Council’s financial regulations, in accordance with the CIPFA Code of Practice for Treasury Management, requires a Treasury Management Strategy to be approved for the forthcoming financial year.  This report complies with these requirements.

The Leader presented report FIN/517 of the Head of Corporate Finance on the Treasury Management Strategy for 2020/2021 which the Council was required to approve before the start of the financial year in accordance with the CIPFA Code of Practice for Treasury Management and the Council’s financial regulations. The strategy itself sets out how the Council would be investing its money across the course of the year. It was noted that the format of the report had changed compared to previous years and that was due to a change in the advisor used by the Council in devising the strategy.

Councillor T Belben presented the O­verview and Scrutiny Commission’s comments on the report as detailed in report OSC/293, to the Cabinet following consideration of the matter at its meeting on 1 February 2021, which included:

·         Acknowledgement that where the Council had investments leased by other parties, it was the intention that rents were paid. Should that not be the case given economic circumstances the Council would liaise with liquidators or investigate relinquishing the property. Investments were entered into with the most suitable terms and best intentions.

·         Clarity sought and obtained on the likelihood of a negative interest rate and the value of investments as a result of a potential move to a negative rate. It was confirmed that only treasury bills were paying negative interest and the Council did not hold any of these at present. Existing investments were mostly fixed term investment and these will pay the interest rate agreed at the time they were taken out.  It was possible there will be negative rates with regards to future investments.

·         Confirmation that the maximum to be lent to any one organisation could be increased to correspond to the counterparty limits.

Councillor Irvine spoke as part of the discussion on the report and in response to a question he asked it was confirmed that the Council was still being in receipt of income from its investment properties, despite of the current economic climate.

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 Full Council be recommended to approve the following items:

a)     the Treasury Prudential Indicators and the Minimum Revenue Provision (MRP) Statement contained within Section 5 of report FIN/517;

b)     the Treasury Management Strategy contained within Section 6 of report FIN/517;

c)     the Investment Strategy contained within Section 7 of report FIN/517;

Reasons for the Recommendations

The Council’s financial regulations, in accordance with the CIPFA Code of Practice for Treasury Management, requires a Treasury Management Strategy to be approved for the forthcoming financial year.  This report complies with these requirements.

To consider report FIN/517 of the Head of Corporate Finance.

The Commission considered report FIN/517 of the Head of Corporate Finance on the Treasury Management Strategy for 2020/2021 which the Council was required to approve before the start of the financial year in accordance with the CIPFA Code of Practice for Treasury Management and the Council’s financial regulations.

During the discussion with the Leader of the Council, Head of Corporate Finance and Chief Accountant, Councillors made the following comments:

·       Acknowledgement that where the council had investments leased by other parties it was the intention that rents were paid. Should that not be the case given economic circumstances the council would liaise with liquidators or investigate relinquishing the property. Investments were entered into with the most suitable terms and best intentions.

·       Clarity sought and obtained on the likelihood of a negative interest rate and the value of investments as a result of a potential move to a negative rate.  It was confirmed that only treasury bills were paying negative interest and the council did not hold any of these at present.  Existing investments were mostly fixed term investment and these will pay the interest rate agreed at the time they were taken out.  It was possible there will be negative rates with regards to future investments.

·       Confirmation that the maximum to be lent to any one organisation could be increased to correspond to the counterparty limits.

·       Verification that in the event that an authority in which the council had placed investments were to issue a Section 114 notice the organisation would still continue in existence and still carry out their statutory functions.  All assets and liabilities will move across to that new authority.

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 along with the tabled questions from Councillor Burrett included in the Appendix.