Agenda item

Consideration was given to a report of the Director of Finance which set out the 2020/21 Treasury Management Strategy (including Minimum Revenue Provision policy statement, annual investment strategy and prudential indicators together with linkages to the Capital Strategy).

The Committee was 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) also required the receipt by full Council of a Treasury Management Strategy Statement.

Members were informed that 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 limit 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 therefore 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 Audit Committee so that any comments could be incorporated into the report before it was considered by Cabinet. It would also be presented to the Overview and Scrutiny Performance and Value for Money Select Committee on 23 January 2019 for review together with all other 2020/21 budget reports.

The Committee asked for and received clarification on the following:-

• Capital Programme re-profiling – the Creating a Better Place initiative was very different and would be managed by a series of targets. It was an ambitious programme that would invest large sums in the Borough, and was geared to delivering and making projects happen.
• Supporting existing businesses in the town centre – this was a complex area and Local Authorities were limited by e.g. State Aid Rules. The ability to attract inward investment very much depended on demonstrating delivery on the ground and often this had to be Council led at the initial stages.

Resolved that the following be commended to the 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 Limit’s 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;

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