Agenda item

To consider the attached report to revise two of the Treasurey Management Investment limits.

Mover: Councillor I Hadley, Chairman of the Audit & Governance Committee

Councillor I Hadley advised that at its meeting held on 28 September 2020, the Audit & Governance Committee considered the Treasury Management Outturn report for 2019/20. This report considered the compliance with the Council’s adopted Treasury Management and Prudential Indicators and reported that full compliance had been achieved on most of the Indicators. However, the cash requirements of the Council’s recently expanded commercial activities had resulted in some technical breaches, especially on Investment Limits. The current investment limits were £3m for Single Institutions and a total of £10m for all Money Market Funds but due to the purchase of Centric Parade, High Road, Loughton this limit was breached.

The Audit & Governance Committee were happy to agree to; (a) increase the Single Institution to £4m; and (b) to increase the £10m limit for the Money Market Fund to £10m for each Money Market Fund, but had reservations regarding recommendation (b) and the lack of a limit on the Money Market Funds that could be invested, thereby allowing no total limit on investments. As a result, the Audit & Governance Committee suggested that a limit of three Money Market Funds be adopted with any breach of this to be discussed at the Audit & Governance Committee prior to it happening. This was not intended to be a financial restriction but was a method of flagging up a possible risk situation.

However, since the Audit & Governance meeting on the 28 September, it had transpired that (b) was contrary to the Council’s constitution and could be put forward for approval at this meeting. The recommendations from the Audit & Governance Committee were:

Recommendations:

(1)        That the following amended Treasury Management Investment Limits be approved:

(a)        Single Institution (excluding the UK Government) to be increased to £4million (previous limit was £3million); and

(b)        Money Market Funds to be increased to £10million per fund, with a maximum of 3 Funds to be invested in at any one time unless Officers have called an emergency virtual meeting with three members of the Audit & Governance Committee – preferably including the Chairman - to discuss the situation (previous limit was £10million in total for all Funds invested in).

Amendment moved by Councillor J Philip, Finance Portfolio Holder and Seconded by Councillor I Hadley

That (b) be amended to read:

(b)        That the Money Market Funds be increased to £10 million per fund with a normal limit of 3 funds to be invested in at any one time. If operational requirements need further use of Money Market Funds the section 151 officer, in consultation with the Finance and Economic Development Portfolio Holder, can authorise further use of these funds provided that this was reported to the Chairman of the Audit and Governance Committee and that a report be presented to the next meeting of the Audit and Governance Committee at the latest.

Report as amended ADOPTED:

            RESOLVED:

(1)        That the following amended Treasury Management Investment Limits be approved:

(a)        Single Institution (excluding the UK Government) to be increased to £4million (previous limit was £3million); and

(b)        That the Money Market Funds be increased to £10 million per fund with a normal limit of 3 funds to be invested in at any one time. If operational requirements need further use of Money Market Funds the section 151 officer, in consultation with the Finance and Economic Development Portfolio Holder, can authorise further use of these funds provided that this was reported to the Chairman of the Audit and Governance Committee and that a report be presented to the next meeting of the Audit and Governance Committee at the latest.