Agenda item

Consideration was given to a report of the Director of Finance which presented to Cabinet, 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.

The report outlined the Treasury Management Strategy for 2022/23 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 are affordable, prudent and sustainable. It is 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 2022/23 covers 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 2022/23.

The report included an economic background commentary which reflected the position at 31 January 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 being considered. These 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 these recent changes in the Codes where information was readily available.

The Audit Committee, the body charged with the detailed scrutiny of Treasury Management activities considered the proposed 2022/23 Treasury Management Strategy report at its meeting on 17 January 2022. It was also presented to the Policy Overview and Scrutiny Committee on 27 January 2022. Both the Audit Committee and the Policy Overview and Scrutiny Committee were content to commend the report to Cabinet.

Options/alternatives considered

In order to comply with the CIPFA Code of Practice on Treasury Management, Cabinet has no option other than to consider and approve the content of the report. Therefore, no options/alternatives have been presented.

RESOLVED - That the Cabinet approved and commended to Council the:

1.    Capital Expenditure Estimates as per paragraph 2.1.2 of the report.

2.    MRP policy and method of calculation as per Appendix 1 to the report.

3.    Capital Financing Requirement (CFR) Projections as per paragraph 2.2.4 of the report.

4.    Projected treasury position as at 31 March 2022 as per paragraph 2.3.3 of the report

5.    Treasury Limit’s as per section 2.4 of the report.

6.    Borrowing Strategy for 2022/23 as per section 2.6 of the report.

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

8.    Level of investment in specified and non-specified investments detailed at Appendix 4 to the report.