Issue - meetings

Report of Chief Finance Officer

The Interim Deputy Chief Finance Officer introduced a report which had been issued as a supplement to the agenda as follows.

The oversight of Treasury Management was a function of the Audit and Standards Committee. The Treasury Management report was one of three reports considered by Full Council on an annual basis, including a mid-year review.

A key point in the report was that a Member-briefing session would be undertaken by the Council’s treasury management advisors in autumn 2019. Treasury management was an important element of governance for the Council and sets the limits and parameters within which officers operated in terms of borrowing and lending.

The annual report set out the Council’s position for 2018/19 and the Council’s level of compliance during that period. All of the indicators for that period had been complied with and there had been no risk of those indicators being breached.

The issue of climate change was raised at the previous meeting. The Council has no direct investments with a climate change risk (for example fossil fuel companies). A watching brief will be maintained as there was a potential for very marginal investments in this area.

Members discussed the item and highlighted the following points and officers responded:

·         Did the Committee discuss the strategies behind the investments as there appeared to be a number of investments with other local authorities, which might not be as effective as investing in external companies? - It was not a deliberate policy. Local authorities had varying cash-flow requirements at different points in time. Some councils are investing while others will be borrowing and often the best rates will be found among local authorities where the risk element is mitigated by the Councils being sovereign backed.

·         There has not been any investment activity on treasury bills, secured investments and tradeable investments during the recent period. Were the returns in this area less productive? - There was generally limited investment in these instruments. Benchmarking measures will be introduced later in the year, It is worth noting that the significant focus of treasury management is to safeguard the cash asset and its liquidity, as opposed to higher returns.

·         Were daily or monthly interest rates looked at when approaching the market with deposits? - The Council’s investments were dictated by its cash-flow. This is monitored and analysed, ensuring the Council’s obligations were being met. Page 15 of the report provided a graph which detailed the Council’s investments. The Council’s priority when looking at investments with marginal returns was to ensure their security.

·         Which debts or loans did the Council have and was there a breakdown of all the Council’s investments? - The Council has a long term debt relating to the Housing Revenue Account. This is an historic debt for the Council to acquire its own housing stock. It was taken out with the Public Works Loan Board; a government loan scheme for local authorities. Appendix C to the report lists the Council’s investments. Further details on individual investments will be provided,  ...  view the full minutes text for item 11