Agenda item

Consideration was given to a report of the Director of Finance which presented the strategy for 2022/23 Treasury Management activities including the Minimum Revenue Provision Policy Statement, the Annual Investment Strategy and Prudential Indicators together with linkages to the Capital Strategy.

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 2021 (the Code) required the receipt by full Council of a Treasury Management Strategy Statement.

The Strategy for 2022/23 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 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 2022/23.

The report included an economic background commentary which reflected the position at 31 December 2021. During 2021, there were two consultation exercises on the Prudential Code and Code of Practice on Treasury Management with a range of proposed changes considered.

The changes mainly related to commercial investments and the requirement for Authorities to adopt a more prudent approach. The second consultation ended on 16 November 2021 and the changes to the Codes were issued on 20 December 2021. The Council’s strategy for 2022/23 had incorporated the recent changes in the Codes where information was readily available.

The proposed Treasury Management Strategy was presented to the Policy Overview and Scrutiny Committee to enable scrutiny of the report so that any comments could be incorporated into the report before it was considered by Cabinet on 14 February 2022 and Council on 2 March 2022.

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 2022 as per paragraph 2.3.3;

5.    Treasury Limit’s as per section 2.4;

6.    Borrowing Strategy for 2022/23 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.