Issue - meetings
Treasury Management Activity for Period Ending 31 August 2013
Meeting: 26/09/2013 - Audit Committee (Item 5)
5 Treasury Management Activity for Period Ending 31 August 2013 PDF 315 KB
To note the treasury management update report.
Additional documents:
Minutes:
The Acting Corporate Director Resources presented the report which advised the Committee of treasury management activity in the current financial year up to 31 August 2013. This report was required to be presented under the powers of the Local Government Act 2003.
In response to Members’ questions, the following information was provided:
The Council’s rationale for investment in small local authorities and whether any had failed to meet the necessary credit ratings:
· the Committee was advised that:
o all local authorities were indemnified by the Government and had AAA rating.
o it was generally understood that no local authorities had failed to meet the credit ratings, however this would be investigated and a written reply provided.
The Committee was advised that a small investment pool in itself was a source of risk. The Council's investment advisers were tasked to monitor the levels of risk exposure. However a change in the pool of risk would be investigated.
Counterparty exposure to banks and local authorities in which the Council invests:
· regarding Members’ concerns that the Council’s choice of investment should be safe and they were advised that the investments chosen had very low risk. The Corporate Director Resources noted that as Lloyds bank remained partly Government owned, it would retain the same rating as Royal Bank Of Scotland (RBS). In response to Members’ concerns, he agreed that the ratings of the Council's chosen investments be investigated and reported back.
Whether the Council expected to be required to reassign funds following the anticipated sale of Lloyds and RBS back to the private sector:
· the Committee was advised that officers would take advice on this matter from the Council’s investment advisers. The Corporate Director, Resources noted that RBS presently remained under Government ownership although some Lloyds Bank shares had been floated on the Stock Exchange. While, overall, it was not expected that these floatations would have an impact on the Council's investments because a risk averse approach to investment had been chosen, a report would be given at the next meeting
Action by
Chris Holme, Acting Corporate Director of Resources
RESOLVED:
That the treasury management update report for the period ending 31 August 2013 be noted.