Issue - meetings

Deputy Leader and Executive Member for Finance and Governance.

RECOMMENDED to Council for approval:

1.    Treasury Management Strategy Statement 2021/22

2.    Prudential Indicators 2021/22

3.    Minimum Revenue Provision Statement 2021/22

4.    Borrowing Limits Provision Statement 2021/22

The Deputy Leader and Executive Member for Finance and Governance, Councillor Schofield, introduced the report which set out the draft Treasury Management Strategy for 2021/22. The purpose of the Strategy was to guide all Treasury Management activity for 2021/22.

Councillor Schofield provided a summary of the four main sections contained in the Strategy:

·       The introduction set out the background in terms of regulations and guidance and the functions and definitions of Treasury Management;

·       The Capital Prudential Indicators confirmed the financial implications of the Council’s expenditure plans, which were aligned with the Capital Programme previously agreed by the Executive, the Capital Financing Requirement, anticipated Borrowing Profile and recommended Minimum Revenue Provision Policy;

·       The Borrowing section set out how the Council planned to fund approved capital projects and made recommendations on the required borrowing limits to manage these activities, and;

·       The Treasury Investment Strategy which was focussed on counterparty security, keeping the Councils money safe and ensuring the Council took full advantage of appropriate investment opportunities in accordance with the risk profile.

A Panel of Members drawn from the Audit Committee and the Overview and Scrutiny Committee had met with the Council’s Treasury advisors to discuss the underlying drivers for the Strategy and raise questions on the contents.

The Vice-Chairman of the Overview and Scrutiny Committee, Councillor Walsh, explained that the Committee had received and considered the Strategy and received a summary document which outlined changes in the Minimum Revenue Provision Policy, a reduction in the Operational Boundary for borrowing, and expectations of continuing lower bank rates forecasts. The Committee:

·       Noted that the level of spending on investments and regeneration in 2020/21 had been delayed. This delay had impacted on the level of borrowing required in the current year.

·       Noted that the counterparty limits were to be increased to reflect the need to hold significant additional funds that were being received from government on a temporary basis during the COVID-19 pandemic.

·       Had no further observations or recommendations

In response to a question from a Visiting Member it was confirmed that capital receipts reflect income the Council receives for the disposal of capital assets.

RECOMMENDED to Council for approval:

1.    Treasury Management Strategy Statement 2021/22

2.    Prudential Indicators 2021/22

3.    Minimum Revenue Provision Statement 2021/22

4.    Borrowing Limits Provision Statement 2021/22

To consider and to provide feedback on the following which are proposed for 2021/22:

·       Treasury Management Strategy Statement;

·       Prudential Indicators:

·       Minimum Revenue Provision Statement; and

·       Borrowing Limits

that will be finalised and submitted for approval by the Executive on 25 March 2021 and Council on 8 April 2021.

Members received the following proposals for 2021/22: Treasury Management Strategy Statement (TMSS), Prudential Indicators, Minimum Revenue Provision (MRP) Statement and Borrowing Limits.

A number of Committee Members had also attended a Member Panel briefing on the Treasury Management Strategy Statement on 15 March which was led by the Council’s Treasury advisers, Link Asset Services and the Finance team. A summary briefing note from that meeting had been circulated to all Overview and Scrutiny Members, which outlined key changes between the 2019/20 and 2020/21 Strategies. This included changes in the MRP Policy, a reduction in the Operational Boundary for borrowing, and the implications of continuing low bank rate interest forecasts. 

Members noted that the level of spending on investments and regeneration in 2020/21 had been somewhat delayed which had a resulting impact on the level of borrowing required in the current financial year. The Committee noted that the counterparty limits were to be increased to reflect the ongoing need to hold the significant additional funds that are being received from Government on a temporary basis during the response to the COVID-19 pandemic.

RESOLVED:

(i)             To note the Treasury Management Strategy Statement 2021/22, Prudential Indicators, Minimum Revenue Provision Statement (MRPS) and the Borrowing Limits and the observations of the Committee.