Issue - meetings

(Director of Resources) To consider the attached report (AGC-007-2015/16).

The Director of Resources presented the annual outturn report for the Council’s Treasury Management Function and Prudential Indicators in 2014/15.

The Director reported that there had been no breaches of policy throughout the year, and that none of the Prudential Indicators had been breached either. The Council had continued to finance its capital programme through the use of internal resources. At the end of the municipal year, both capital receipts and the Major Repairs Reserve had higher balances than anticipated, and therefore the Council had adequate resources to finance its Capital Programme in the medium term. The Council had borrowed £185.5million to fund the Housing Revenue Account self-financing payment, which had resulted in the Council becoming a debt authority.

When questioned by the Committee, the Director stated that the contract with Arlingclose would be re-tendered in four years time when the current contract expired. It was highlighted that there were only two main companies in the market which offered these services to local authorities – Arlingclose and Capita. There were regular meetings with Arlingclose where suggestions were made about the Council’s investments; the Council was currently looking at some diversification for their portfolio of investments. The Principal Accountant responsible for the Treasury Management Strategy also supervised two Directorates and regularly attended courses run by Arlingclose.

When questioned about the Council’s capital programme, the Director was confident that the Council had sufficient capital reserves, especially as the Epping Forest Shopping Park project was expected to produce significant revenue streams. The current estimate of the cost to construct the Park was £30million. It was acknowledged that some capital investment might have to made in the Leisure Centres as part of the new Leisure Management Contract procurement process, but the Council would look to gain a revenue return from any capital expenditure.

The Chairman commented that the Treasury Management Strategy appeared risk adverse and a prudent approach was being taken by Officers. It was noted from analysing the Council’s capital investments that the projected 5% return from the Shopping Park would be much better than the current 1% return from the Council’s cash deposits.

Resolved:

(1)        That the Annual Outturn Report on Treasury Management and the Prudential Indicators for 2014/15, and the management of the risks therein, be noted.

(Director of Resources) To consider the attached report (FPM-010-2015/16).

The Principal Accountant presented a report on the Annual Outturn Report on the Treasury Management and Prudential Indicators 2014/15.

The Principal Accountant reported that the annual treasury report was a requirement of the Council’s reporting procedures, covered the treasury activity for 2014/15 and the actual Prudential Indicators for 2014/15. During the year the Council had financed all of its capital activity through capital receipts, capital grants and revenue contributions and there had been no additional borrowing in the year to add to the £185.456m taken out previously through the Public Works Loan Board (PWLB) to finance the payment in relation to the self-financing of the HRA.  The Council had achieved its targets for its treasury and prudential indicators and the report and the appendices would be considered by the Audit and Governance Committee on 21 September 2015.

Resolved:

(1)        That the 2014/15 outturn for Prudential Indicators shown within the appendices be noted; and

(2)                  That the Treasury Management Outturn Report for 2014/15 be noted.

Reasons for Decision:

The report was presented for noting as scrutiny was provided by the Audit and Governance Committee who make recommendations on amending the documents, if necessary.

Other Options Considered and Rejected:

Members could ask for additional information about the CIPFA Codes or the Prudential Indicators.