Issue - meetings

The Deputy Leader and Executive Member for Finance & Governance.

RESOLVED:

That the Executive:

1.    Consider the Treasury Management Strategy Statement for 2022/23 set out in the report; and

2.    Consider the Treasury Management Prudential Indicators for 2022/23 as set out in the report.

The Executive considered the Treasury Management Strategy for 2022/23.

The purpose of the Strategy is to guide all Treasury Management activity for the coming financial year. The adoption of the updated Treasury Strategy by Council ensures compliance with the Chartered Institute of Public Finance Code of Practice on Treasury Management and Prudential Code for Capital Finance in Local Authorities.

The report noted the Treasury Management Indicators including the Capital Prudential Indicators confirming the financial implications of the Council’s capital expenditure plans, borrowing to fund and manage capital projects and investment. It noted the Minimum Revenue Provision Policy, including the potential impact of the proposed changes in 2023/24.

The report also acknowledged that this was a period of considerable change for local authority treasury activities with a summary of the key changes and timescales.

Members of Audit Committee with the Chair of Overview and Scrutiny Committee, Councillor Harrison, were consulted and met with the Treasury advisors, Link, in early March.

The Audit Committee met on 15 March 2022 to consider the Strategy and noted the Treasury Management Strategy Statement for 2022/23 and Treasury Management Prudential Indicators for 2022/23 as set out in the reports.

RESOLVED:

That the Executive:

1.    Considered the Treasury Management Strategy Statement for 2022/23 set out in the report; and

2.    Considered the Treasury Management Prudential Indicators for 2022/23 as set out in the report; and

RECOMMENDED their approval to Council.

The Committee considers and provides feedback on the following which are to be finalised and submitted for approval by the Executive on 24 March 2022 and Council on 7 April 2022:

     I.        The Treasury Management Strategy Statement for 2022/23 as set out in this report; and

    II.        The Treasury Management Prudential Indicators for 2022/23 as set out in this report.

The Interim Head of Finance explained that the report sets out the Treasury Management Strategy for 2022/23.

The purpose of the Strategy was to guide all Treasury Management activity for the coming financial year.

Due to the technical nature of the subject and the requirements of the treasury regulations it was complicated and lengthy.

In summary, the Strategy comprised of four main sections plus supporting appendices.

The introduction of the strategy statement set the background in terms of the regulations and guidance, and the functions and definition of Treasury Management, including the requirement for the Council to receive and approve three main treasury reports each year, comprising:

(i)        Forward looking Treasury Management Strategy report (this report)

(ii)        Mid-year Treasury Management report; and

(iii)       The Annual Treasury outturn report.

Other requirements covered in section 1 was the scrutiny role of the Audit Committee; ensuring adequate training of members and officers with responsibility for treasury management; and the requirement to call on the services of independent advisors.

The Capital Prudential Indicators section confirmed the financial implications of the Council’s capital expenditure plans. They were aligned with the Capital Programme for 2022/23 onwards that was approved by Executive and full Council the previous month. 

They also confirmed the Capital Financing Requirement and anticipated Borrowing Profile.

Additionally, this section sets out the recommended Minimum Revenue Provision Policy for repayment of debt.

The borrowing section focussed on how the authority planned to fund capital projects that had already been approved and made recommendations on the required borrowing limits to manage these activities.

The Investment section focussed on counterparty security, keeping funds safe and ensuring the Council was taking advantage of appropriate investment opportunities in accordance with its risk profile.

In response to a member question, the Interim Head of Finance explained that table 4 in Annex 1 to the report summarised the funds that were forecast to be available to fund capital investment in the short-term. Calling on these funds allowed the Council to delay borrowing from external sources. This reflected the fact that the Council continued to maintain a healthy level of reserves. There would however be a requirement in the future to take out long-term borrowing so that the reserves could be made available for their intended purpose.

RESOLVED that The Committee notes:

(i)            The Treasury Management Strategy Statement for 2022/23 as set out in the report; and

(ii)          The Treasury Management Prudential Indicators for 2022/23 as set out in the report.