Consideration was given to a report of the Director of Finance which sought to present to Cabinet, the strategy for 2023/24 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 2023/24 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. 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) also required the receipt by full Council of a Treasury Management Strategy Statement.
The Strategy for 2023/24 covers two main areas.
1) Capital Issues:
• The Capital expenditure plans and the associated Prudential Indicators
• The Minimum Revenue Provision (MRP) Policy Statement
2) 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 2023/24.
The report included the most recently available economic background commentary which reflected the position at 22 December 2022.
The Audit Committee, the body charged with reviewing Treasury Management activities and considered the proposed 2023/24 Treasury Management Strategy report at its meeting on 16 January 2023. It was also presented to the Policy Overview and Scrutiny Committee on 26 January 2023. Both the Audit Committee and the Policy Overview and Scrutiny Committee were content to commend the report to Cabinet and Council.
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 this report. Therefore, no options/alternatives have been presented.
RESOLVED – That:
1. Capital Expenditure Estimates as per paragraph 2.1.2; of the report are approved and commended to Council.
2. The MRP policy and method of calculation as per Appendix 1 of the report are approved and commended to Council.
3. The Capital Financing Requirement (CFR) Projections as per paragraph 2.2.3 of the report are approved and commended to Council.
4. The Projected treasury position as at 31 March 2023 as per paragraph 2.4.3 of the report is approved and commended to Council.
5. The Treasury Limits as per section 2.5 of the report are approved and commended to Council.
6. The Borrowing Strategy for 2023/24 as per section 2.7 of the report is approved and commended to Council.
7. The Annual Investment Strategy as per section 2.11 including risk management and the creditworthiness policy at section 2.12 of the report is approved and commended to Council.
8. The level of investment in specified and non-specified investments detailed at Appendix 5 of the report is approved and commended to Council.