Agenda item

Treasury Management Strategy Statement 2020/21

Minutes:

The Select Committee gave consideration to a report of the Director of Finance which presented the strategy for 2020/21 Treasury Management activities including the Minimum Revenue Provision Policy Statement, the Annual Investment Strategy and Prudential Indicators together with linkages to the Capital Strategy.

 

The Cabinet Member for Finance and Corporate Resources, and the Director of Finance presented the report.

 

Members were informed that the Council was required through regulations supporting the Local Government Act 2003 to ‘have regard to’ the Prudential Code and to set Prudential Indicators for the next three years to ensure that the Council’s capital investment plans were affordable, prudent and sustainable. It was also required to produce an annual Treasury Strategy for borrowing and to prepare an Annual Investment Strategy setting out the Council’s policies for managing its investments and for giving priority to security and liquidity of those investments.

 

The Chartered Institute of Public Finance and Accountancy (CIPFA) Code of Practice on Treasury Management 2017 (the Code) required the receipt by full Council of a Treasury Management Strategy Statement.

 

The Strategy for 2020/21 covered two main areas.

 

Capital Issues

        The Capital expenditure plans and the associated Prudential Indicators

        The Minimum Revenue Provision (MRP) Policy Statement

 

Treasury Management Issues:

        The Current Treasury Position

        Treasury Indicators which limited the treasury risk and activities of the Council

        Prospects for Interest Rates

        The Borrowing Strategy

        The Policy on Borrowing in Advance of Need

        Debt Rescheduling

        The Investment Strategy

        The Creditworthiness Policy

        The Policy regarding the use of external service providers.

 

The report outlined the implications and key factors in relation to each of the above Capital and Treasury Management issues and made recommendations with regard to the Treasury Management Strategy for 2020/21.

 

The proposed Treasury Management Strategy was presented for scrutiny to the Overview and Scrutiny Performance and Value for Money Select Committee so that any comments could be incorporated into the report before it was considered by Cabinet.

 

Members sought and received clarification on the following:

·       Page 393 of the report, Table 1 – this showed unallocated funds that could be used for new projects and could provide a Capital Programme contingency. The amount increased in proportion to the programme.

·       Page 394 of the report, Table 2, HRA figures – these aligned with those in the HRA report. The figure for 2020/2021 had been increased by the re-profiling from 2019/2020.

·       Ethical investment – the Council has an ethical investment policy and the fourth principle of investment was an ethical approach. It was difficult to always ensure and tools were being developed to track investments and show where they ended up. The Council was very risk-averse and would always make sure investments were safe.   

 

RESOLVED that the following be accepted and recommended to Cabinet:

1.     Capital Expenditure Estimates as per paragraph 2.1.2;

2.     MRP policy and method of calculation as per Appendix 1;

3.     Capital Financing Requirement (CFR) Projections as per paragraph 2.2.4;

4.     Projected treasury position as at 31 March 2020 as per paragraph 2.3.4;

5.     Treasury Limits as per section 2.4;

6.     Borrowing Strategy for 2020/21 as per section 2.6;

7.     Annual Investment Strategy as per section 2.10 including risk management and the creditworthiness policy at section 2.11; and

8.     Level of investment in specified and non-specified investments detailed at Appendix 5.

Supporting documents: