Agenda item

Draft Treasury Management and Capital Strategies 2019-20

The Committee is requested to consider and recommend to the Cabinet and the Council for approval the Treasury Management Policy Statement, the Treasury Management Strategy Statement, the Investment Strategy and relevant Indicators for 2019-20 and the Council’s Capital Strategy for 2019-20 -2022-23.


Mr Catlow introduced the item. He explained that the council’s Treasury Strategy incorporates the council’s risk appetite statement and wider investment strategy with both covering treasury and non-treasury investments. He confirmed that CIPFA have added a requirement to prepare a Capital Strategy to summarise the detail contained in other reports including the capital and project programme and the five year financial strategy. The document is therefore intended to provide a concise, accessible view of the authorities approach to capital investment and treasury management with a focus on risk management. 


Mr Catlow explained that the Cabinet is expected to consider the report on 5 February 2019 prior to approval being sought from Full Council for the final contents of the strategy before the beginning of the new financial year. He highlighted the glossary provided at appendix five which explains some of the financial terminology. He explained that CIPFA and MHCLG’s focus for the revised guidance had been to expand the purview of the treasury and investment strategies to cover a broader range of non-treasury investments (largely commercial and service based investments and loans) as well as promoting a greater emphasis on risk management and governance arrangements for wider non-treasury investments.


Mr Catlow then clarified that he had prepared the strategy to capture the proposals discussed at the member workshop prior to Christmas with the most significant changes outlined in appendix one including:


·       Proportionality

·       Treasury investment limits

·       Operational and authorised boundaries for debts


Mr Catlow and Mrs Belenger responded to members questions. Mr Catlow confirmed that the guidance provided to officers is not very clear on what can be classified as commercial property. With regard to the request for a graph detailing the value of commercial assets across a number of years Mr Catlow explained that he would need to refer to the Estates team. With regard to assessing whether appropriate investment judgements are being made Mrs Belenger explained that as part of balancing the budget investment opportunities are considered in line with the council’s investment protocol. With regard to the reason for increasing pool funds from £20 million to £35 million Mr Catlow explained that it allows for possibility of increased investment rather than the necessity. With reference to page 17 of the agenda pack he clarified that it should read £30 million limit not £10 million limit. Mrs Belenger explained that the £1 million to be invested in unrated banks includes building societies.


Mr Catlow also confirmed that the council is debt free and there are no current plans to change that status. He explained that if the council is required to loan money it is on a short term basis for operational purposes such as payment of a precept where funding is late. He also confirmed that the framework for treasury management is delegated to the Section 151 Officer with members given the opportunity to consider the allowed limits. Mrs Belenger added that the reason for the Section 151 Officer to take out a loan for the council would be solely in relation to cash flow management and to require additional levels of approval would not be practical for operational reasons. Mr Catlow added that on a daily basis a treasury officer assesses the council’s financial position and informs a senior officer if there is requirement to obtain a short term loan. Every decision must be documented on a daily decision sheet.


The Committee discussed the idea of setting a trigger point for the amount that can be invested rather than setting a cap. Mrs Belenger agreed that officers would consider this option as part of future financial strategies but for this coming financial year a balance would need to be built in. Mr Catlow agreed that consideration could be given to shifting the focus to the proportion of income from taxation. Members suggested a change to the proportionality paragraph on page 26 of the Strategy which officers were to include in the draft Strategy to be considered by the Cabinet and this is reflected.


With regard to page 36 of the agenda pack Mr Catlow agreed to remove the word ‘property’ from the grey box relating to security. In addition the non-treasury investment box should read ‘Authority may purchase assets’.




1.     That the Treasury Management Policy Statement, the Treasury Management Strategy Statement, the Investment Strategy and relevant Indicators for 2019/20 be recommended to the Council for approval subject to officers amending the proportionality paragraph as agreed by the Committee.

2.     That the Council’s Capital Strategy for 2019/20 – 2022/23 be recommended to the Council for approval.

3.     That the Committee requests officers to investigate the proportionality indicator recommended by the MHCLG guidance and report back to a future meeting.


The Committee took a short break.


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