Agenda item
Treasury Management Strategy Statement, Investment Strategy Report and Capital Strategy Report For 2019-20
- Meeting of Audit Committee, Thursday, 31st January, 2019 6.30 p.m. (Item 5.3)
- View the background to item 5.3
Minutes:
Mr Kevin Miles, Chief Accountant Corporate Finance presented the report and stated the report included an update on the treasury management activity, the investment strategy and the Capital Strategy. Mr Miles said the report would also be considered by Full Council at its meeting of 20th February 2019.
Mr Miles said there had been no major changes to the strategies since last year’s report and that the Council was lending to other Local Authorities rather than the banks.
Mr Miles referred Members to paragraph 3.30, the capital programme and prudential borrowing and stated that the borrowing would be up to £276m in total from 2019-2022.
Mr Miles also referred Members to paragraph 3.26 and stated that the legislation in relation to money market funds and pooled funds for Capital Expenditure for local authorities needed to be amended as these funds would become capital expenditure when the UK leaves the EU if the legislation was not amended.
In response to questions from members the following was noted:
· Mr Miles reassured Members that the government was aware of the error in legislation and was working to rectify this by the scheduled exist date of 29th March 2019. However it was a question of waiting and seeing what would happen. He said the fund would be treated as capital receipts rather than revenue income in that eventuality.
· In response to why the total fund in the table at paragraph 3.30 for 2018/19 and 2019/20 showed an increase and then a drop in 2020/21 and 2012/22, Mr Miles explained that the new Whitechapel development was the cause of the temporary increase. Mr Miles said he would confirm the reason for the peak which he believed was due to the Housing Revenue capital schemes.
o ACTION: Mr Miles to send Members of the Committee an email as to the reasons why there is an increase in the capital programme.
· Mr Miles confirmed the Council was looking to invest in ‘greener’ investments and was moving away from investing in fossil fuels if suitable investments with equivalent returns and cash flows were identified. Officers continue to work with the Council’s advisors to identify suitable investments. He confirmed this was the long term strategy of the Council.
· With respect to Mulberry Housing Society Mr Miles confirmed there were property acquisitions in the pipeline however the Society was a little behind on schedule.
Members of the Committee RESOLVED to
i. Approve and adopt the following policy and strategies:
a) The high level overview of Capital Strategy Report set out in section 2 at annex A attached to this report;
b) The Treasury Management Strategy set out in sections 5-7 at annex A attached to this report, which officers involved in treasury management, must then follow;
c) The new Investment Strategy set out in section 8 at annex A attached to this report, the Council has committed up to £54.6m of service investments to Seahorse Homes Ltd and Mulberry Housing Society;
ii. Approve the prudential and treasury management indicators as set out in appendix 1 of annex A attached to this report;
iii. Note section 3.26 latest development of money market funds (MMF) and pooled funds and section 3.27 -3.29 on MMF reformation; and
iv. Delegate authority to Acting Corporate Director, Resources
· to amend prudential and treasury indicators, once the capital programme is finalised.
Supporting documents:
- Treasury Management Strategy Statement, Investment Strategy Report and Capital Strategy Report For 2019-20, item 5.3 PDF 206 KB
- Annex A - Treasury Management Strategy Statement, Investment Strategy Report and Capital Strategy Report For 2019-20, item 5.3 PDF 462 KB
- Appendix A – Counter Party Credit Rating List, item 5.3 PDF 39 KB