Decision details

Recommend to Council the approval of the Annual Treasury Management Strategy Statement.

Matter for decision

The Council is required by regulations issued under the Local Government Act 2003, to produce an Annual Treasury Management Strategy Report. The officer’s report complied with the CIPFA Code of Practice on Treasury Management (revised 2011). The Code required as a minimum, receipt by full council of an Annual Treasury Management Strategy Statement – including the Annual Investment Strategy and Minimum Revenue Provision Policy – for the year ahead, a half-year review report and an Annual Report (stewardship report) covering activities in the previous year.

 

Decision of the Executive Councillor for Finance and Resources to recommend to Council:

i.             The Annual Borrowing Statement at paragraph 4, the Council’s Minimum Revenue Provision (MRP) Policy at paragraph 5 and the Council’s Annual Investment Strategy as contained within paragraphs 8 & 9.

ii.            An amendment to the counterparty list to include Enhanced Cash Funds. A limit of £5m is recommended and has been updated within Appendix A as follows

Name	Recommended Limit (£)
Enhanced Cash Funds (Standard & Poor’s: AAA/S1, Fitch: AAA/V1)	5m (in each fund)

 

iii.          Changes to the estimated Prudential & Treasury Indicators for 2015/16 to 2018/19 inclusive as set out in Appendix C.

iv.          That the following counterparty limits are required to come into effect on 1 April 2016 until further notice:-

·        Reduce HSBC’s counterparty limit by £5m to £20m; and

·        Increase Barclays Bank plc counterparty limit by £5m to £25m.

Reason 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 Head of Finance and reference was made to the additional recommendation circulated prior to Committee in relation to the Council’s Banking Contract which was awarded to Barclays Bank with effect from 1 April 2016. The incumbent providers are HSBC. The new banking contract was engrossed by the Head of Legal Services on 13^th January 2016.

 

As a result an additional recommendation (additional text underlined) to the Council’s counterparty limits was required as follows:

 

The Executive Councillor is asked to recommend to Council that the following counterparty limits are required to come into effect on 1 April 2016 until further notice:-

·        Reduce HSBC’s counterparty limit by £5m to £20m; and

·        Increase Barclays Bank plc counterparty limit by £5m to £25m.

The Committee made the following comments in response to the report.

i.             Questioned whether the credit ratings of the companies who tendered for the banking contract were taken into consideration as part of the procurement process for the bank contract.

ii.            In relation to enhanced cash funds, questioned what the risk was relative to other instruments.

The Executive Councillor confirmed that the procurement process was there for a reason to ensure that inappropriate considerations were not taken into account as part of the evaluation process of the submitted bids.

 

The Head of Finance responded that the enhanced cash funds were variable asset value funds, the capital asset value was variable and designed for the public sector market. Officer’s were conscious of the requirement for the funds to retain their value. The Council could not use investments for finance which would be needed in the short-term. Officer’s were recommending the best rated funds.

 

The Committee unanimously resolved to endorse the recommendations which included the additional recommendation.

 

The Executive Councillor for Finance and Resources approved the recommendations.

 

Conflicts of Interest Declared by the Executive Councillor for Finance and Resources (and any Dispensations Granted):

Not applicable.