Agenda item

The Committee considered a report of the Chief Finance Officer that presented the strategy for 2022/2023 Treasury Management activities including the Minimum Revenue Provision Policy Statement, the Annual Investment Strategy and Prudential Indicators, together with linkages to the Capital Strategy. In addition to the report the Chief Finance officer circulated a briefing note that expanded on various ‘key’ issues that were detailed in the report. 

The report outlined the Treasury Management Strategy for 2022/2023, including the Minimum Revenue Provision Policy Statement, Annual Investment Strategy and Prudential Indicators together with linkages to the Capital Strategy. 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. The Council 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 2021 (the Code) also required the receipt by full Council of a Treasury Management Strategy Statement. The Strategy for 2022/2023 covered two main areas: Capital Issues and Treasury Management Issues.

The Capital Issues were concerned with the capital expenditure plans and the associated Prudential Indicators and the Minimum Revenue Provision (MRP) Policy Statement.

The Treasury Management Issues: detailed 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 and the Policy regarding the use of external service providers. The Committee’s report outlined the implications and key factors in relation to each of the above Capital and Treasury Management issues and made recommendations regarding the Treasury Management Strategy for 2022/2023.

The report included an economic background commentary reflecting the latest positions at 31^st December 2021. During 2020/2021, there were two consultation exercises on the Prudential Code and Code of Practice on Treasury Management with a range of proposed changes being considered. These mainly related to commercial investments and the requirement for Authorities to adopt a more prudent approach. The consultation ended on 16^th November 2021 and the changes to the Codes were issued on 20^th December 2021. The Council’s Strategy for 2022/2023 incorporated these recent changes in the Codes where information was readily available. The proposed Treasury Management Strategy was presented to the Audit Committee to enable scrutiny of the report before it’s further consideration in the budget setting cycle. It was also due to be presented to the Policy Overview and Scrutiny Committee on 27^th January 2022. Any comments from the Audit Committee and the Policy Overview and Scrutiny Committee would be incorporated into the ‘budget’ report that was to be presented to Cabinet on 14^th February 2022 and Council on 2^nd March 2022.

Resolved:

That the Audit Committee commends to the Cabinet on 14^th February 2022 the following, as detailed in the submitted report:

1.  Capital Expenditure Estimates as set out at paragraph 2.1.2.

2.  The Minimum Reserve Position policy and method of calculation as detailed at Appendix 1.

3.  The Capital Financing Requirement (CFR) Projections as set out at paragraph 2.2.4.

4.  The Projected treasury position as reported on 31^st March 2022, as detailed at paragraph 2.3.3.

5.  The Treasury Limit’s as detailed in Section 2.4.

6.  The Borrowing Strategy for 2022/2023 as detailed in Section 2.6.

7.  The Annual Investment Strategy as detailed in Section 2.10 (including risk management and the creditworthiness policy referenced at Section 2.11)

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