Issue - meetings

To consider the report of the Chief Finance Officer.

Corporate Services Scrutiny Committee considered the report at its meeting on 23 November 2017 and its comments will be reported.

The report of the Chief Finance Officer was submitted advising Members on the current Treasury Management performance for the 2017/18 financial year, and the position regarding investments and borrowings at 30 September 2017.

The Chief Finance Officer advised that the request in the recommendation to increase the maximum to be invested in the Property Fund would allow the Council to increase investment returns. There had been a statutory override to protect the capital value of monies invested in agreed Property Funds but after a change in accounting treatment the Government had not yet reinstated this override for any monies invested. The Department of Communities and Local Government were currently considering the position and monies would only be invested in the Property Fund if the Government reinstated the statutory override that the CCLA Property Fund currently had.

In response to a Member’s question, the Chief Finance Officer commented that if the statutory override was reinstated it could be time limited and that was the reason for the requested increase in the investment in property. There was currently an earmarked reserve to cover any decrease in the capital value of the current Property Fund and further investment would not take the Council below its minimum level of reserves of £3 million.

Corporate Services Scrutiny Committee considered the report at its meeting on 23 November 2017 and its comments were reported.

RECOMMENDED that Council approves the:-

(1)          Treasury Management report in respect of the first six month of the 2017-18  year; and

(2)          Revised Treasury Management Strategy which includes a request to increase the limit for investment in Property from £5m to £10m.

To consider the report of the Chief Finance Officer.

The Chief Finance Officer presented the report on the current Treasury Management performance for the 2017/18 financial year, and the position regarding investments and borrowings at 30 September 2017. He also requested Council approve the revised Treasury Management Strategy which included a request to increase the limit for investment in Property Funds from £5m to £10m.

He explained that there had been an improvement against the estimate for net interest payable from the General Fund and, for the first time in several years there had been an interest rate increase, which had a negligible impact on borrowing rates. He discussed the General Fund, highlighting that it had shown an improvement against the estimate for net interest payable.

He advised that the Treasury Management Strategy which had been approved by Council in February 2017, had no significant changes and continued to hold only small surplus funds. He explained that there had been two investments in the CCLA and LAMIT property fund and there was a need for an increase in the limit for investment. It was noted that the returns on the Property Fund were significantly higher than the returns on other investment options available.

He referred Members to the report which detailed the Counterparty list, which detailed the other banks that Council could use for deposits.

In response to questions from Members, the Chief Finance Officer responded as follows:-

·         Confident with the investments made and money generally loaned  to Local Authorities;

·         Money deposited in the bank was a deposit and not an investment, so the bank could use the money as they saw fit;

·         The Treasury Management Strategy had been approved by Full Council and acted as a strict rule followed meticulously by the authority;

·         He would be meeting with the Treasury Management Advisors to discuss the Treasury Framework and would respond back to Members. All investments were, in his professional opinion, legitimate; and

·         Council would decide whether the increase for property fund be approved.

Corporate Services Scrutiny Committee noted the Treasury Management report for 2017/18 financial year which included a request to increase the limit for investment in Property Funds from £5m to £10m and recommended approval by Executive and Council.