Issue - meetings

To consider the report of the Head of Treasury Services.

Scrutiny Committee – Resources considered the report at their meeting on 17 June 2009 and their comments will be reported.

(Report circulated)

The report of the Head of Treasury Services was submitted, informing Members of the overall performance for the 2008-2009 financial year and the position regarding investments and borrowings at 31 March 2009.

Scrutiny Committee – Resources considered the report at their meeting on 17 June 2009 and the support and comments of members were noted.

Executive was pleased to note that the Fund Manager had returned an overall rate of return of 7.15% on managed cash funds for 2008-09 compared to a benchmark return of 3.74%.  Members were reminded that the Fund Manager would be attending the Members’ Briefing on 9 September to talk about the Investment Strategy and Ethical Investment.

The Head of Treasury Services updated Executive on the position with regard to the Icelandic bank investments. The Local Government Association’s legal advice had placed local authority deposits as “priority claims”. As such, it was anticipated that 100% of the Glitnir investment would be returned and 83% of the Landsbanki investment. It was hoped some interest may also be payable.

A Member queried the role of the in-house team in respect of the Investment Strategy and was assured that officers worked within strict parameters. Members supported the request of Scrutiny Committee –Resources that the Leader and Chair of that Committee should be kept informed of any significant issues which arose. In response to a query regarding the split of investment between banks, the Head of Treasury Services advised that it was good practice to spread the risk.

The Chair acknowledged that all investment which made acceptable returns carried intrinsic risk and that the Council’s prudent Investment Strategy had underpinned the Council’s ability to deliver quality services whilst keeping Council tax rates at the 5^th lowest level in the country.

Executive recommended that the Treasury Management report for the 2008-2009 financial year be noted.

The report of the Head of Treasury Services was submitted, informing Members of the overall performance for the 2008-2009 financial year and the position regarding investments and borrowings at 31 March 2009.

Scrutiny Committee – Resources considered the report at their meeting on 17 June 2009 and the support and comments of members were noted.

Executive was pleased to note that the Fund Manager had returned an overall rate of return of 7.15% on managed cash funds for 2008-09 compared to a benchmark return of 3.74%.  Members were reminded that the Fund Manager would be attending the Members’ Briefing on 9 September to talk about the Investment Strategy and Ethical Investment.

The Head of Treasury Services updated Executive on the position with regard to the Icelandic bank investments. The Local Government Association’s legal advice had placed local authority deposits as “priority claims”. As such, it was anticipated that 100% of the Glitnir investment would be returned and 83% of the Landsbanki investment. It was hoped some interest may also be payable.

A Member queried the role of the in-house team in respect of the Investment Strategy and was assured that officers worked within strict parameters. Members supported the request of Scrutiny Committee - Resources that the Leader and Chair of that Committee should be kept informed of any significant issues which arose. In response to a query regarding the split of investment between banks, the Head of Treasury Services advised that it was good practice to spread the risk.

The Chair acknowledged that all investment which made acceptable returns carried intrinsic risk and that the Council’s prudent Investment Strategy had underpinned the Council’s ability to deliver quality services whilst keeping Council tax rates at the 5^th lowest level in the country.

RECOMMENDED that the Treasury Management report for the 2008-2009 financial year be noted.

(Report circulated)

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

The Head of Treasury Services presented a report on the overall performance for the 2008/09 financial year and the position regarding investments and borrowings at 31 March 2009.

The General Fund showed a net reduction in interest receivable compared to the estimate, the other interest earned related to car loan repayments and various repayments of interest.  The reduction against budget had been caused by a number of factors detailed in the report. The managed cash fund had reduced during the year from £23.4 million to £20.1 million as at 31 March 2009.  Some prudent action by our Investment Manager had achieved high interest rates, with an overall return rate of 7.15% compared to a benchmark return of 3.74%.  However it was unlikely that such favourable performance would be repeated in the coming year.

The Head of Treasury Services responded to a number of Member comments in relation to the likelihood of a successful claim in relation to the Icelandic Bank (Landsbanki).  He advised that the Bank’s assets should be sufficient to repay at least 90% of the Council’s deposits and possibly even some lost interest.  They were relying on the LGA’s current legal advice to place local authority claims as ‘priority claims’.

He also responded to a Member comment about the level of delegation by the in-house team in respect of the Investment Strategy.  He added that decisive action often had to be taken in conjunction with the external Fund Manager, and he reassured Members that the existing policy was already very prudent. It was considered appropriate that the Leader and Chair of Scrutiny Committee- Resources be kept informed of any significant issues which arose.

The Scrutiny Committee – Resources noted the Treasury Management report for the 2008/09 financial year and recommended approval by the Executive.

(Report circulated)