Chichester District Council
Agenda item

Agenda item

2018-2019 Treasury management 2018-19 Out-turn

The Cabinet is requested to consider the agenda report and make the following resolution:

 

The Cabinet is requested to review and note this summary of treasury management activities and performance for 2018-2019.

Decision:

RESOLVED

 

That the summary of the treasury management activities and performance for 2018-2019 be noted.

Minutes:

Mrs Lintill introduced the item. She explained that the report provides a summary of treasury management activity for 2018-19. The Corporate Governance and Audit Committee (CGAC) had also considered the report on 25 July 2019 but made no additional comments.

 

Mrs Lintill outlined the four main elements of the report:

 

·       A summary of treasury activity and performance during 2018-19

·       An update on the councils directly owned investment properties

·       A compliance report against the limits and indicators set out in the councils treasury strategy

·       A general update including Brexit preparations and proposals on additional investments using external pooled funds

 

Mrs Lintill confirmed that the previous request by CGAC for officers to investigate setting an indicator to measure proportionality of commercial income generated by the council is underway but will require further guidance from the Chartered Institute of Public Finance and Accountancy.

 

Mrs Lintill then highlighted Table 1 which outlines the increase in treasury investments since 2014 which in part had been driven by New Homes Bonus and CIL receipts. She explained that Table 2 shows the position of the council’s external funds as at 31 March 2019. She then confirmed that since the first external investments were made in 2016 the council has earnt £2 million in income to support services.

 

Mrs Lintill explained that the only item subject to further scrutiny is the net capital loss position on the value of the council’s external funds. She confirmed that the overall trend is positive and the council remains committed to hold funds in the economic cycle. Mrs Lintill drew attention to Section 5 of the report which sets out the present value of the council’s direct property assets. The capital value of the assets remain above the sums originally paid and have generated a 5.6% return.

 

Mrs Lintill then explained with reference to Appendix C that there had been one reportable exception due to an error in identifying the correct counterparty limit for an investment. The error led to a higher investment being made than permitted by the Council’s Treasury Management Strategy. Mrs Lintill confirmed that the investment was paid back in full and no further incidents have taken place.

 

Mrs Lintill then outlined the council’s Brexit preparation steps to reduce the risk of a temporary disruption to the international financial system. Further UK domicile market funds have been opened to hold temporary liquidity and a backstop account has been set up with the treasury which has been tested.

 

Mr Briscoe wished to thank officers for the report.

 

With regard to section 8.2 of the report Mrs Plant requested a verbal update on the review of the funds. Mr Catlow confirmed that an officer/member meeting had recently taken place with a representative from Arlingclose (the council’s Treasury Management Advisor) to review performance and lessons learnt from the council’s external pool funds. Arlingclose were instructed to come back at the end of September with proposals for future investments.

 

Decision

 

The Cabinet then voted unanimously to make the resolution below.

 

RESOLVED

 

That the summary of the treasury management activities and performance for 2018-2019 be noted.

 

Supporting documents:

 

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