Issue - meetings

To present the report of the Director of Function (Resources)/Section 151 Officer.

It was resolved to accept and to note the Treasury Management Strategy for 2022/23 and to forward the TM Statement to the Executive without further comment.

The report of the Director of Function (Resources)/Section 151 Officer incorporating the Treasury Management Strategy Statement for 2022/23 was presented for the Committee’s consideration. The report outlined the Treasury Management Strategy for 2022/23 including the Annual Investment Strategy, the Annual Minimum Revenue Provision Policy Statement, the Treasury Management Policy Statement, the capital plans and associated Prudential Indicators.

The Treasury Management Strategy sits below the Capital Strategy and considers the impact of that strategy on the Council’s borrowing and investment. It sets out how both strategies will be undertaken in a controlled way which is in line with a suitable level of risk that the Council wishes to take having regard to the guidance set out in the CIPFA Code of Practice on Treasury Management. The Treasury Management Strategy outlines the Council’s approach to borrowing and investment which follows on from the Capital Strategy, sets out the constraints on borrowing, determines a set of prudential indicators that ensure the affordability of the Council’s capital plans and determines the Council’s risk appetite and approach to managing its investments. These elements cover the legislative and regulatory requirements.

The Strategy for 2022/23 covers two main areas – capital issues and treasury management issues and considers the key factors in relation to each area and how those shape the Treasury Management strategy and approach.

The Director of Function (Resources)/Section 151 Officer in presenting the report confirmed that there are no proposed amendments to the core principles of the 2021/22 Statement and highlighted the following –

·         The economic background commentary (Appendix 3 to the report) and interest rate forecast to March 2025 and implications for the Treasury Management Strategy.

·         The proposed capital expenditure programme for 2022/23 to 2024/25 as set out in table 3 of the report including proposed capital spend, how this is to be financed and the balance to be funded from borrowing over each of the three years.

·         The impact of the Council’s capital expenditure plans and the Minimum Revenue Provision (MRP) charge on the Capital Financing Requirement (CFR) and the level of external and internal borrowing as shown in Table 4 of the report showing a projected increase in external borrowing over the next three years but remaining within the acceptable parameters.

·         The borrowing strategy confirming that an under borrowed position is being currently maintained and that a pragmatic approach to changing circumstances will be adopted i.e. if it was felt there was a significant risk of a sharp fall in long and short term rates then long term borrowings will be postponed and potential rescheduling from fixed rate funding to short term borrowing will be considered if it is cost-effective to do so. Conversely, if it was felt that there is a significant risk of a much sharper rise in long and short term rates than currently forecast, then the portfolio position will be re-appraised.

·         The Council’s approach to borrowing in advance of its needs confirming that the approach remains not to borrow solely to profit from the investment of the  ...  view the full minutes text for item 4