Issue - meetings

To consider the report of the Chief Finance Officer.

Corporate Services Scrutiny Committee considered the report at its meeting on 25 January 2018 and its comments will be reported.

The report of the Chief Finance Officer was submitted seeking adoption by the Council of the Treasury Management Strategy Report, incorporating the Annual Investment Strategy 2018/19, as required under section 15(1)(a) of the Local Government Act 2003.

The Chief Finance Officer advised that the last strategy had been approved in December 2017 for in-house investments and requested the authorisation limit for investments in a property fund to be increased to £10m. There had been two changes to the strategy. The Council now had two new treasury management advisors and there had been an increase in the time limit for Foreign owned banks that deal in sterling and meet the stated credit ratings from six to nine months.

He explained the proposed changes to the time limit in respect of UK owned banks or building societies that deal in sterling and meet the stated credit rating, was to increase the time period from three to six months. These, however, would increase the risk factor on the investments made, but credit ratings were continually reviewed and updated by the Council’s Treasury Management advisors.

In response to questions from Members, the Chief Finance Officer explained that interest rate increases can impact the Council, borrowing was limited under the treasury management strategy. Interest rates were monitored and should they rise, a request would be made for longer term lending. The last interest rate rise had not caused a significant impact.

Corporate Services Scrutiny Committee considered the report at its meeting on 25 January 2018 and its comments were reported.

RECOMMENDED that Council adopt the new Treasury Management Strategy and delegations contained therein.

To consider the report of the Chief Finance Officer.

The Chief Finance Officer presented the report on the Treasury Management Strategy and position of the Annual Investment Strategy 2018/19.  The report was a statutory requirement and must be approved by Full Council.  He explained that the Council had adopted the CIPFA Treasury Management in the Public Services: Code of Practice, which required the Council to approve a Treasury Management Strategy and Investment Strategy before the start of each financial year, to decrease the risk of exposure to financial loss of invested funds.  He commented on the key issues of the Treasury Management Plan, and provided an overview of the current levels of borrowing and investments, along with the estimated changes and the financial impact for the year on both the General Fund and the HRA. 

The Chief Finance Officer reported that, following a retendering process, LINK Asset Services had been appointed as the Council’s Treasury Management advisors. They had already been consulted on a change to the time limits for UK owned banks or building societies eligibility to offer a loan from three to six months. There was now an opportunity for the City Council to have access to a wider range of loan products and more favourable interest rates. He responded to a Member’s concern about the opportunity to borrow money in advance of spending need, and stated that the Council had not used this facility to date, and if any long term borrowing was required, any loan would be arranged at a fixed rate.

Corporate Services Scrutiny Committee noted the Treasury Management report for 2018/19 financial year and recommended approval by Executive and Council.