Decision details

Recommend to Council this Half Yearly Report which includes estimated Prudential & Treasury Indicators.

Matter for Decision

The Council adopted The Chartered Institute of Public Finance and Accountancy (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 which includes 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.   The half-year report had been prepared in accordance with CIPFA’s Code of Practice on Treasury Management and covers the following:-   ·        The Council’s capital expenditure (prudential indicators); ·        A review of compliance with Treasury and Prudential Limits for 2016/17; ·        A review of the Council’s borrowing strategy for 2016/17; ·        A review of the Treasury Management Strategy Statement and Annual Investment Strategy; ·        A review of the Council’s investment portfolio for 2016/17; and; ·        An update on interest rate forecasts following economic news in the first half of the 2016/17 financial year.   In line with the Code of Practice, all treasury management reports have been presented to both Strategy & Resources Scrutiny Committee and to Full Council.

 

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

i.             Approve the Treasury Management Half Yearly Update Report 2016/17, which includes the Council’s estimated Prudential and Treasury Indicators 2016/17 to 2019/20.

ii.            Approve the amendments to the Counterparty limits as follows:

 

Name	Recommended Limit (£)
Enhanced Cash Funds (Standard & Poor’s: AAAf/S1, Fitch AAA/V1)	10m (in each fund)
CCLA Local Authorities’ Property Fund	15m

 

iii.           Approve the increase to the upper limit on principal sums to be deposited for over 1 year to £50m.

iv.          Approve an amendment to the Minimum Revenue Provision Policy for 2016/17.

v.           Agree to remove Deutsche Bank from the Counter Party list.

 

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.

 

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

i.             Asked whether the Council had invested in Deutsche Bank and if the Bank could be suspended from the Counter Party list. Also requested that Counterparties that did not meet the criteria should be removed or suspended from the Counter Party list.

ii.            Requested that future reports contained an analysis on any changes to the way in which money was invested into assets.

iii.           Asked about the liquidity of the Council’s assets.

 

The Head of Finance said the following in response to Members’ questions:

i.             Deutsche Bank was put on the investment list 2-3 years ago when it had sufficient credit status. The Council had never used them and would not do so (referred to p277 of the agenda pack). The Council used Capita’s creditor criteria before any investment were made and Deutsche Bank did not meet this criteria.

ii.            Confirmed that the Council had various investments which could be liquidated / accessed in a variety of different periods of time.

 

The Executive Councillor confirmed that the General Fund Medium Term Financial Strategy report contained further information on borrowing money and the changes to the way in which the Council was looking to invest its money.

 

Councillor Cantrill proposed an additional recommendation that Deutsche Bank was removed from the Counter Party list.  

 

The Committee resolved by 4 votes to 0 to endorse the amended recommendations.

 

The Executive Councillor approved the amended recommendations.

 

Conflicts of Interest Declared by the Executive Councillor (and any Dispensations Granted)

No conflicts of interest were declared by the Executive Councillor.