Issue - meetings

Matter for Decision

The Council was required by regulations issued under the Local Government Act 2003, to produce an annual treasury report reviewing treasury management activities and the actual prudential and treasury indicators for each financial year.

 

This report met the requirements of both the CIPFA Code of

Practice on Treasury Management (the Code) and the CIPFA

Prudential Code for Capital Finance in Local Authorities (the Prudential Code) in respect of 2017/18. Both these publications have been revised by CIPFA and references to these documents are to the 2017 Editions.

 

During the 2017/18 the minimum requirements were that Council should receive:

-      An annual strategy in advance of the year

-      A mid-year treasury update report and;

-      An annual review following the end of the year describing the activity compared to the strategy.

 

In line with the Code of Practice on Treasury Management all treasury management reports have been presented to Strategy and Resources Scrutiny Committee and to Full Council.

 

Decision of Executive Councillor for Finance and Resources

i.              To recommend to Council to approve the report which included the Council’s actual Prudential and Treasury Indicators for 2017/18.

 

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.        Referred to p83 of the agenda and benchmarks and asked if the Council had a view on how the City Council was performing against peer Councils and if there was any other ways of monitoring. 

    ii.        Referred to Appendix D on p92 of the agenda and third party risk. He wanted to see associated credit ratings for these organisations so money which was no longer safe could be identified. Asked if visibility could be given in future and how credit ratings were monitored on a day to day basis.

 

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

     i.        Interest rates on cash deposits are currently below the inflation rate. The council would generally consider CPI to be the relevant benchmark for comparison purposes, as its costs generally increase by CPI rather than RPI.  Confirmed the council took part in benchmarking groups however these were of limited use as each council had its own investment strategy. Some comparisons were done but had to be viewed with caution.

    ii.        Credit ratings were looked at on a day by day basis and advice was taken from treasury management advisors. She questioned if a credit rating would be useful in annual reports, but said she was happy to talk through investment decision making. 

 

The Executive Councillor for Finance and Resources commented:

    i.          That low interest rates were a concern, making it difficult for the council to get a good return on its investments. £15m had been put in the CCLA Property Fund, at higher rates of return than traditional cash deposits to improve returns.

 

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

 

The Executive Councillor approved the recommendations.

 

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

No conflicts of interest were declared by the Executive Councillor.