Issue - meetings

(Accountancy Service Manager) To consider the attached report (AGC-001-2019/20).

The Interim Strategic Director presented the Annual Outturn report on the Council’s Treasury Management function and Prudential Indicators for 2018/19.

The Interim Strategic Director reminded the Committee that the annual Treasury Management outturn report was a requirement of the Council’s reporting procedures to comply with the Code of Practice issued by the Chartered Institute of Public Finance & Accountancy (CIPFA), and covered the Treasury activity for the 2018/19 year as well as the associated risks for the Treasury Management function with how those risks were managed during the year.

The Interim Strategic Director reported that, overall, the Council had managed its Treasury Management function within the previously agreed parameters, and continued to finance its Capital Programme through the use of internal resources. Whilst the Capital Receipts Reserve had been fully exhausted, it was anticipated that future Right-to-Buy sales would fund some part of the Programme and the Major Repairs Reserve would be available to support the on-going capital maintenance of the housing stock, before the possible need to borrow arose towards the end of the 2018/19 financial year. The Council did not breach any of the Treasury Prudential Indicators during the year.

Mr T Jarvis enquired whether the Council had the ability to respond to any sudden volatility in the financial markets? The Interim Strategic Director responded that the Council did have the ability, and the Council’s portfolio of investments was designed to spread the risks. The Council’s investments were actually very liquid at the moment with a substantial amount being kept in short term notice accounts. In addition, the Council produced cash flow forecasts to give a month-by-month forecast of the cash that would be available, and the advice of the Council’s appointed Treasury Management advisors was sought for any significant investment decisions. Although, it was acknowledged that the process could be improved further.

The Chairman commented that this was a prudent Council, not a high risk organisation in terms of where it invested its cash reserves; the policy had not changed for a number of years and it did not look like the Council needed to change its policy any time soon. The Strategic Interim Director added that the Council’s balance sheet strength had a silver rating, and that the Council was strongly in the middle of the silver rating.

            Resolved:

            (1)        That the continuation of the prudent approach of this Council towards             the risks associated with the Treasury Management be noted; and

(2)        That the continuation of the prudent approach and policy with the Council’s Treasury Management function throughout 2018/19 be welcomed and noted.