The Group Manager – Chief Accountant presented a report updating the Committee on the mid-year review and half year outturn position for treasury management activities and treasury management indicators for 2020-21, highlighted compliance with the Council’s policies and practices which had been reported to Cabinet and Council and provided an update on the proposed changes to the Treasury Management Strategy 2020-21 to be presented to Council for approval. 

The Group Manager – Chief Accountant explained that the Committee is responsible for ensuring effective scrutiny of the Treasury Management Strategy and policies.  He stated that the Council is required to approve a Treasury Management Strategy prior to the start of each financial year which sets out the Council’s and Chief Financial Officer’s responsibilities, delegation, and reporting arrangements.  He informed the Committee that following a recent re-tender exercise for the Council’s treasury management advisors, Arlingclose were the successful tenderer and will continue to be the Council’s advisors for the next 4 years.

The Group Manager – Chief Accountant reported that the Council has complied with its legislative and regulatory requirements during the first half of 2020-21, with the TMS for 2020-21 reported to Council on 26 February 2020 and the Half Yearly Outturn being reported to Council on 18 November 2020.  In addition, a quarterly monitoring report was presented to Cabinet in July 2020.  He presented a summary of the treasury management activities for the first half of 2020-21 and informed the Committee that the Council had not taken long term borrowing since March 2012 and it was not expected there would be a requirement for any new long term borrowing in 2020-21.  Favourable cash flows had provided surplus funds for investment and the balance on investments at 30 September 2020 was £64.29 million with an average interest rate of 0.24%.   

The Group Manager - Chief Accountant informed the Committee that the Treasury Management Code requires the Council to set and report on a number of Treasury Management Indicators, which either summarise the expected activity or introduce limits upon the activity.  He stated all local authorities are required to conduct a mid-year review of its treasury management policies, practices and activities and that the outcome of the review is that there are changes required to investment limits, namely, to increase the overall balance that can be invested into Money Market Funds (MMFs) from £20 million to £30 million, which will enable the Council to increase the number of MMF’s available and thus assist the Council in investing positive cash balances into a much wider investment portfolio.  In addition, an amendment to the investment limit for Registered Providers from £3 million to £5 million will provide a greater opportunity of being able to use this type of investment than is currently available.  As the Council has had positive cash balances this will provide the Council with wider scope in making investments at a practical level whilst also providing greater

diversity of funds invested.  He outlined the proposed revised TMS and the proposed amendments, these amendments have been discussed with the Council’s Treasury Management Advisors.

RESOLVED:               That the Committee:

•           Noted the treasury management activities for 2020-21 for the period 1 April 2020 to 30 September 2020 and the projected Treasury Management Indicators for 2020-21.

•           Recommended that the proposed changes to the Treasury Management Strategy 2020-21 be presented to Council for approval in November 2020.