Decision details

Matter for Decision

The Council is required by regulations issued under the Local Government Act 2003, to produce an annual strategy treasury report reviewing treasury management activities.

 

Decision of the Leader of the Council

 

Resolved to:

 

       i.          Recommend to Council changes to counterparty limits as set out below (detailed in section 6 and Appendix A of the Officer’s report):

 

a)   Increase current single counterparty limits from £10m to £15m

 

b)   Increase the counterparty group limit from £15m to £22.5m (1.5 times single counterparty limit)

 

c)    Increase HSBC Deposit Account limit by £4m to £20m

 

d)   Apply a single counterparty Certificates of Deposit limit of £10m; and

 

e)   Apply a Money Market Fund limit of £10m per fund

 

     ii.          Recommend to Council changes to the estimated Prudential & Treasury Indicators for 2013/14 to 2016/17, inclusive, as set out in Appendix E of the Officer’s report.

 

Reasons for the Decision

As set out in the Officer’s report

 

Any Alternative Options Considered and Rejected

Not applicable.

 

Scrutiny Considerations

The committee received a report from the Director of Resources regarding the Treasury Management Strategy Report 2013/14 to 2016/17.

 

 

In response to member’s questions the Director of Resources confirmed the following:

 

i.                 In the current financial climate it was important for the Council to take a cautious approach to treasury management.

ii.               Explained the difference between Certificates of Deposits and Money Market Funds.

iii.             Agreed to provide further detail to members regarding Appendix C of the Officer’s report and where claims against LBI would feature.

iv.             The Council moved their funds effectively between banks in order to ensure the best rates.

v.              A standardised credit rating system across all local authorities ensured a robust approach to identifying risk.

vi.             Whilst increased levels of deposits would ensure greater flexibility for the Council, the instruments had only been used between £8m and £10m in the last financial year.

 

As the instruments had not been used, and they wouldn’t have been used above the £10m limit even if they were available, the Chair proposed the following amendments to recommendation d) and e) of the Officer’s report (replacement underlined and original struck through):

 

e)   Apply a single counterparty Certificates of Deposit limit of £10m £15m and

 

f)     Apply a Money Market Fund limit of £10m £15m per fund

 

The committee resolved by 4 votes to 0 to agree the amendments.

 

The Committee resolved unanimously to endorse the amended recommendations.

 

The Leader of the Council approved the amended recommendations.

 

Conflicts of Interest Declared by the Leader of the Council (and any Dispensations Granted)

Not applicable.