Agenda item - Treasury Management Strategy 2022-2023

The Leader’s Portfolio

To consider report FIN/557 of the Head of Corporate Finance, which was referred to the meeting of the Overview and Scrutiny Commission held on 31 January 2022.

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/557;

b) the Treasury Management Strategy contained within Section 6 of report FIN/557;

c) the Investment Strategy contained within Section 7 of report FIN/557;

d) to amend the prudential indicators in the Treasury Management Strategy 2022/2023 (FIN/557) as set out in Section 4 of this report (FIN/561) before considering the recommendations contain within it.

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 recommended amendment to the Budget and Council Tax Report (FIN/560) would impact on the capital programme and prudential indicators in the Treasury Management Strategy. The recommendations in this report enable the financing of the revised capital programme.

The Leader presented report FIN/557 of the Head of Corporate Finance on the Treasury Management Strategy for 2022/2023 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.

The Leader highlighted the additional recommendation containedwithin report FIN/561 in the supplementary agenda that requested amendment to the prudential indicators in the Treasury Management Strategy 2022/2023 (report FIN/557) as set out in Section 4 of report FIN/561 before considering the recommendations contain within it.

Councillor Khan presented the Overview and Scrutiny Commission’s comments on the report to the Cabinet following consideration of the matter at its meeting on 31 January 2022, which included:

· That the Commission sought further clarity over 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 acknowledged that it was now unlikely to achieve negative interest rates.

· That the Commission had commented that commercial investments were shown at the market value from March 2021 and it was estimated the investments would stay at the same value. It would be beneficial to have historic cost, valuation and re-valuation. This could be considered as part of the Treasury Outturn report.

Councillor Crow was invited to speak on the item and commented over the ethical investment policy suggesting that crypto currency should be added to the list of investment activities that the Council would not be investing in as shown in Section 7.2. In response Councillor Lamb confirmed that he was fine with the Council not investing in crypto currencies.