Agenda item

To submit a report by the Head of Function (Resources)/Section 151 Officer.

The report of the Head of Function (Resources)/Section 151 Officer incorporating the Treasury Management (TM) Strategy Statement for 2019/20 was presented for the Executive’s consideration.

The Portfolio Member for Finance reported that this report is presented to ensure that the Council is implementing best practice in accordance with the CIPFA Code of Practice on Treasury Management. In line with the Code which recommends that the TM Strategy Statement be scrutinised prior to being presented for adoption, the Statement has been considered by the Audit and Governance Committee which under the Council’s TM Scheme of Delegation is charged with this function. The Portfolio Member said that the Strategy Statement was accepted by the Audit and Governance Committee at its meeting on 12 February, 2019 where it was resolved to forward it to the Executive without additional comment. He confirmed that in terms of updates to the Treasury Management Strategy Statement there are no proposed amendments to the core principles and policies of the 2018/19 Statement.

The Head of Function (Resources)/Section 151 Officer said that the proposed TM Strategy for 2019/20 has not materially changed from the Strategy in 208/19 mainly because the economic situation and level of interest rates have not changed to an extent that requires the Strategy to be reviewed. The Strategy confirms that the Council will not borrow more than, or in advance of its needs solely in order to profit from the investment of the extra sums borrowed and that it will where possible, use its own available cash balances to borrow internally. The Council’s approach to investment will continue to focus on security of capital as a priority followed by liquidity and then returns on investment. These considerations will determine where the Council makes it investments and the length of time for which the funds will be committed.

The Executive in noting the Strategy sought clarification of whether there are plans being made for the various scenarios in relation to the conclusion of the Brexit process, specifically if the UK was to exit the European Union without a deal which outcome is likely to have an economic impact and consequently, an impact on the borrowing and investment climate.

The Head of Function (Resources)/Section 151 Officer said that the Authority has taken advice from its Treasury Management Advisors who have assessed the possible scenarios for Brexit. Possibly in the immediate wake of Brexit, the amount which public sector bodies can borrow may be reduced and interest rates may decrease. The Officer said that the Authority’s borrowing needs are not pressing at present and the Authority’s Treasury Management Strategy over recent years still holds good – the Authority views prospects for interest rate rises as minimal and gradual thereby making it unnecessary to borrow in order to lock into low interest rates. The Officer said that despite the economic effect which Brexit may have, he was confident that the Strategy ensures that the Council is operating in the best way possible.

It was resolved to accept the Treasury Management Strategy Statement for 2019/20 and to forward the Statement to the Full Council without additional comment.