Issue - meetings

To consider the report of the Head of Treasury Services.

Scrutiny Committee – Resources considered the report at its meeting on 23 November 2011 and comments will be reported.

(Report circulated)

(Minute 111)

The report of the Head of Treasury Services was submitted, reporting on the current performance for the 2011/12 financial year and the position regarding investments and borrowings at 30 September 2011.

The Head of Treasury Services reported on the impact of the global economic position and the implications for the Council in terms of investments and interest rates. He identified the range of factors which had caused the estimated General Fund net reduction against budget.

Members were pleased to note that it was anticipated that most of the funds would be recovered following the winding up of the Icelandic banks although this could be over a period of years. They acknowledged the contribution of the Local Government Association, acting on behalf of authorities, to the achievement of this successful outcome.

Whilst noting the significant sum required to “buy” the Council out of the Housing Revenue Account subsidy system, members welcomed the perceived long term benefit of the new arrangements.

Scrutiny Committee – Resources considered the report at their meeting of 23 November 2011 and their comments were noted.

Executive recommended that Council:-

(1)        notes the Treasury Management report for the first six months of 2011/12; and

(2)        approves the amendments to the Council’s Operational Boundary and Authorised Limit to allow the Council to borrow the funds required for the HRA financing regulations.

The report of the Head of Treasury Services was submitted, reporting on the current performance for the 2011/12 financial year and the position regarding investments and borrowings at 30 September 2011.

The Head of Treasury Services reported on the impact of the global economic position and the implications for the Council in terms of investments and interest rates. He identified the range of factors which had caused the estimated General Fund net reduction against budget.

Members were pleased to note that it was anticipated that most of the funds would be recovered following the winding up of the Icelandic banks although this could be over a period of years. They acknowledged the contribution of the Local Government Association, acting on behalf of authorities, to the achievement of this successful outcome.

Whilst noting the significant sum required to “buy” the Council out of the Housing Revenue Account subsidy system, members welcomed the perceived long term benefit of the new arrangements.

Scrutiny Committee – Resources considered the report at their meeting of 23 November 2011 and their comments were noted.

RECOMMENDED that Council:-

(1)        notes the Treasury Management report for the first six months of 2011/12; and

(2)        approves the amendments to the Council’s Operational Boundary and Authorised Limit to allow the Council to borrow the funds required for the HRA financing regulations.

(Report circulated)

To consider the report of the Head of Treasury Services – report circulated

The Head of Treasury Services presented a report on the current performance for the 2011/12 financial year and the position regarding investments and borrowings as at 30 September 2011.

He updated Members on the net interest position and advised that the reduction in investment interest earned against the estimate was in part due to the recent decision by credit agencies to downgrade the Royal Bank of Scotland and Lloyds Banking Groups which meant that the Council could no longer hold as much cash in its call accounts.  The Council was therefore utilising the Government’s Debt Management Office account in line with the treasury management strategy.  However this paid a much lower interest rate of 0.25%.

Members were advised that the Government intended to introduce a self-financing regime for the Housing Revenue Account (HRA) and the Council would be required to pay the Government an amount of money (currently £57.3 million) to “buy” itself out of the subsidy system. The Council would have to undertake long term borrowing in order to be able to afford to pay this sum to the Government.  To facilitate this it was proposed that the Operational Boundary and the Authorised Limit were increased to cover the amounted to be paid to the Government.

The Scrutiny Committee - Resources noted the Treasury management report for the first six months of 2011/12 and of the Council’s Operational Boundary and Authorised Limit to allow the Council to borrow the funds required for the HRA self-financing regulations and recommended approval by Council.

(Report circulated)