Agenda item

The Director for Corporate Services to submit a report to provide a summary of the Treasury activities in 2017-18. The report also covers the actual position on the Prudential Indicators in accordance with the Prudential Code. This is to enable the Committee to scrutinise these prior to their submission to the Council.

The Director for Corporate Services submitted a report to provide a summary of the Treasury activities in 2017-18. The report also covered the actual position on the Prudential Indicators in accordance with the Prudential Code. Members were advised that it is a requirement for Treasury Management reports to be scrutinised prior to being submitted to Full Council for approval. Previously this was undertaken by the Budget & Strategic Planning Working Group. Under the new governance arrangements this responsibility has passed to the Corporate Committee.

It was proposed that a further recommendation be added to thank Councillor de Burle for his scrutiny work on Treasury Management through BSPWG. The Corporate Director welcomed Councillor de Burle to continue his work and invited him to contact herself or the Corporate Services Manager if there was anything he wished to discuss in the future regarding Treasury Management.

The Director for Corporate Services advised that this annual report focuses on activities for the last financial year in comparison to the Treasury Management Strategy and Prudential Indicators approved in February 2017 when the budget was set. Through more diversification and primarily the use of property funds the level of investment rates has improved over that achieved in 2116/17 despite the challenging period for investment returns. This increase in income has flowed into the budget for 2018/19 and has helped to reduce the pressure on the budget as a whole.

There has been a change to the codes and regulatory environment within which the Treasury Management function operates, notably the requirement to approve a Capital Strategy next year with the budget and Treasury Management Strategy which officers are working on. The Director for Corporate Services commented that she was pleased to advise members  that the council has been able to demonstrate that it met the criteria to operate at a “professional” level which allowed it to access a full range of investments that it was already utilising. This status has to be demonstrated annually to achieve “professional” status. As well as the requirement to approve a Capital Strategy the council is also looking at a variety of commercial activities which could impact on its Treasury Management activities and notably the need to consider borrowing in order to invest in activities e.g. the creation of a housing company.

A member commented that the plan for the creation of such a housing company was not what he had originally envisaged. The Chief Executive advised that in May of this year the Corporate Development Plan approved the setting up of a housing company and further detail is to go the Policy Forum meeting next week. Member direction will be sought as to what may be required for MBC. To assist with costs and sharing expertise this council is to work with 4 other councils to create a collaborative development company but will also be delivering a Melton specific delivery company. Other councils will likely follow suit to ensure that delivery is determined based on local needs. A business case will be brought to this Committee in September this year.

John East, previously Interim Director for Growth and Regeneration, will be  retained as a strategic consultant to maintain momentum on this venture drawing on his wealth of experience in successfully managing such projects in other parts of the country.

A member enquired whether local people could invest in the housing company and it was advised that this will all be considered as part of the project along with the possibility of extending into other areas; initially it will be important to keep things as simple as possible and build confidence in the approach before embarking on more creative options.

Councillor de Burle moved the original recommendations with the addition of the further recommendation and Councillor Illingworth seconded.

All members were unanimously in favour.

Resolved that:

1)     the Treasury Management Annual Report for 2017-18 be approved for submission to the Council and;

2)     the actual position on Prudential Indicators for 2017-18 be noted.

3)     thanks to be given to Councillor de Burle for his scrutiny of Treasury Management through the now disbanded Budget & Strategic Planning Working Group.