The material relevant to this item is the report on pages 35 to 39 of the agenda and its six appendices considered by the Cabinet at its meeting on 5 February 2019.
The following recommendations were made by the Cabinet to the Council:
RECOMMENDATIONS TO THE COUNCIL
a) That the Treasury Management Policy Statement, the Treasury ManagementStrategy Statement and Investment Strategy for 2019-20, incorporating the temporary limits established in appendix 6 be approved.
b) That the Chichester District Council Capital Strategy for 2019-20 to 2023-24be approved.
c) That the prudential indicators and limits for 2019-20 included in appendix 2be approved.
d) That the investigation by officers whether to set an indicator to measure theproportionality of commercial income generated by Chichester District Council, and if so, to recommend a suitable indicator for inclusion in the Chichester District Council’s 2020-21 Treasury Strategy be approved.
The Council considered the recommendation made to it by the Cabinet at its meeting on Tuesday 5 February 2019, as set out on pages 35 to 39 of the agenda report and its six appendices on pages 67 to 124 of the main agenda supplement for that meeting.
Mr P Wilding (Cabinet Member for Corporate Services) formally moved the Cabinet’s recommendation and this was seconded by Mrs E Lintill (Deputy Leader of the Council and Cabinet Member for Community Services).
Mr Wilding presented the Cabinet’s recommendation. The Council was required to approve a treasury management strategy (TMS) each year. The Chartered Institute of Public Finance and Accountancy (CIPFA) and the Ministry of Housing, Communities and Local Government (MHCLG) had updated the framework within which CDC conducted treasury management and other investing activities, in order to impose a greater focus on risk management and governance. The key changes were (a) treasury management now covered investments made for service and/or commercial reasons and (b) there was a requirement to publish a capital strategy to show how capital expenditure, capital financing and treasury management activity contributed to the provision of local services and how associated risk was managed by councils. The main focus of CDC’s treasury operation in the next year would be to evaluate and seek to make further prudent investments in external pooled funds. Accordingly the ceiling for external pooled funds in which CDC could invest had been increased from £20m to £35m, thereby enabling up to £17m further investment with a potential annual income revenue generation of £500,000; this could be extremely valuable for maintaining services in uncertain times. Whilst the TMS confirmed CDC’s intention to remain debt free, it proposed an increase in operational and authorised limits for external debt to ensure that sufficient liquidity was available to cover for contingencies such as delayed taxation receipts. The TMS listed approved lenders and safeguards applied. Counterparty limits had been increased. CDC’s Corporate Governance and Audit Committee had reviewed the TMS and made a recommendation relating to the setting of a maximum target level of commercial income. Appendix 6 addressed the potential impact of the European Union Withdrawal Bill.
The focus of a short discussion was how the investment protocol took into account not only the need for a sound financial basis but also achieving where possible local, social benefits. The making of Brexit contingency plans was commended.
On a show of hands the members voted in favour of the Cabinet’s recommendation with no votes against and no abstentions.
(1) That the Treasury Management Policy Statement, the Treasury ManagementStrategy Statement and Investment Strategy for 2019-2020, incorporating thetemporary limits established in appendix 6 be approved.
(2) That the Chichester District Council Capital Strategy for 2019-2020 to 2023-2024be approved.
(3) That the prudential indicators and limits for 2019-2020 included in appendix 2be approved.
(4) That the investigation by officers whether to set an indicator to measure theproportionality of commercial income generated by Chichester DistrictCouncil, and if so, to recommend a suitable indicator for inclusion in theChichester District Council’s 2020-2021 Treasury Strategy be approved.