Decision details

Matter for decision

The Council is required to receive and approve, as a minimum, three main treasury management reports each year.

 

The first and most important is the Treasury Management Strategy (this report), which covers:

 

·      capital plans (including prudential indicators);

·      a Minimum Revenue Provision policy which explains how unfinanced capital expenditure will be charged to revenue over time;

·      the Treasury Management Strategy (how investments and borrowings are to be organised) including treasury indicators; and

·      a Treasury Management Investment Strategy (the parameters on how investments are to be managed).

 

The statutory framework for the prudential system under which local government operates is set out in the Local Government Act 2003 and Capital Financing and Accounting Statutory Instruments. The framework incorporates four statutory codes. These are:

 

·      the Prudential Code (2021 edition) prepared by CIPFA;

·      the Treasury Management Code (2021 edition) prepared by CIPFA;

·      the Statutory Guidance on Local Government Investments prepared by the Department for Levelling Up, Housing and Communities (DLUHC) (effective 1 April 2018); and

·      the Statutory Guidance on Minimum Revenue Provision prepared by DLUHC (effective 1 April 2019).

 

 

The Council’s S151 Officer has considered the deliverability, affordability and risk associated with the Council’s capital expenditure plans and treasury management activities.  The plans are affordable. Where there are risks such as the slippage of capital expenditure, or reductions in investment values or income, these have been reviewed and mitigated at an acceptable level. The Council has access to specialist advice where appropriate.

 

Decision of the Executive Councillor for Finance and Resources

Recommend to Council to: Approve the report, including the estimated Prudential and Treasury Indicators for 2022/23 to 2025/26 (inclusive) as set out in Appendix C.

 

Approve the renewal of the £7.5 million loan to Cambridge City Housing Company Ltd (CCHC) for a further term of 5 years from 1 April 2022, at an interest rate of 2.02% per annum.

 

Introduce an authorised limit for other long-term liabilities of £2 million, in response to technical accounting changes brought about by the adoption of IFRS 16 (see 7.3 of the report).

 

Reason for the decision

As detailed in the officer report.

 

Any alternative options considered and rejected

None.

 

Scrutiny considerations

Regarding the third recommendation in the report, the Head of Finance advised the committee that the Chartered Institute of Public Finance and Accountancy had delayed the introduction of IFRS 16 but it was still prudent for the Council to increase the limit for long term liabilities now.

 

In response to a question, the Head of Finance updated the committee that work was being undertaken with the Council’s treasury advisors so the Council could more closely monitor the ESG credentials of its investments and this will be included in future reports.

 

The scrutiny committee supported the recommendations.

 

The Executive Councillor approved the recommendations.

 

Conflicts of interest declared by the Executive Councillor (and any dispensation granted)

No conflicts of interest were declared by the Executive Councillor.