Issue - meetings

The Portfolio Holder for Corporate Finance and Resources to submit a report providing a summary of the treasury activities to the end of September 2019 and covering the actual position to date on the Prudential Indicators in accordance with the Prudential Code.

(1)  Cabinet REFERRED the mid-year position on treasury activity for 2019/20 to Council for noting;

(2)  Cabinet REFERRED the mid-year position on the prudential indicators for 2019/20 to Council for approval;

(3)  Cabinet RECOMMENDED to Council that a new Treasury Management Provision Reserve be established from 2019/20, with delegated authority given to the Director for Corporate Services to determine the affordable amount to contribute into this each year during the statutory override period.

Councillor Ronnie de Burle, Portfolio Holder for Corporate Finance and Resources introduced the report, the purpose of which was to provide a summary of the treasury activities to the end of September 2019 and cover the actual position to date on the Prudential Indicators, in accordance with the Prudential Code.

Councillor de Burle gave a summary of the report, highlighting the increasing interest rate forecasts at section 3.2 of Appendix A of the report, which had implications for borrowing.  The Council’s borrowing was £33.413m.  This figure had not changed since the beginning of the year.

Councillor de Burle confirmed that as a result of good management the Council’s investment portfolio had risen and the gross budgeted investment return was predicted at £365k and increase over that budgeted at £223k, which was an encouraging position.  However, the underlying economic environment remained difficult for the Council.

During discussion the following point was noted:

·         The budget and the Treasury Management strategy were approved together each year.  The current strategy had a difference of approximately £7m between how much the Council was able to borrow (operational limit) how much it currently had. There is also a higher authorised limit.   These were internally imposed limits which ensured that all borrowing was in line with that budgeted and expected in line with financial plans.  The Borrowing threshold could be increased if necessary as long as this was in line with the financial plans of the Council.

DECISIONS (NON-KEY)

(1)  Cabinet REFERRED the mid-year position on treasury activity for 2019/20 to Council for noting;

(2)  Cabinet REFERRED the mid-year position on the prudential indicators for 2019/20 to Council for approval;

(3)  Cabinet RECOMMENDED to Council that a new Treasury Management Provision Reserve be established from 2019/20, with delegated authority given to the Director for Corporate Services to determine the affordable amount to contribute into this each year during the statutory override period.

Reasons for decision:

The Treasury Management Code required the Council to provide a mid-year update on Treasury Management activities to the Council.  It was a requirement that Treasury Management performance was scrutinised during the year which fell within Cabinet’s remit.

To facilitate the decision making process and support capital investment decisions the Prudential Code requires the Council to agree and monitor a minimum number of prudential indicators.