The Interim Chief Officer – Finance, Performance and Change reported in compliance with the requirement of the Chartered Institute of Public Finance

and Accountancy’s ‘Treasury Management in the Public Services: Code

of Practice’ to produce interim Treasury Management Reports; the Treasury Management Indicators for 2020-21 and provided an update on the proposed changes to the Treasury Management Strategy 2020-21 for approval. 

The Interim Chief Officer – Finance, Performance and Change explained that Treasury management is the management of the Council’s cash flows, borrowing and investments, and the associated risks.  Treasury risk management at the Council is conducted within the framework of the Chartered Institute of Public Finance and Accountancy’ (CIPFA) Treasury Management in the Public Services: Code of Practice 2017 Edition (the CIPFA Code) which requires the Council to approve a Treasury Management Strategy (TMS) before the start of each financial year. The CIPFA Code also requires the Council to set a number of Treasury Management Indicators, which are forward looking parameters and enable the Council to measure and manage its exposure to treasury management risks, and these are included throughout this report.  In addition, the Welsh Government (WG) issued revised Guidance on Local Authority Investments in November 2019 that requires the Council to approve an Investment Strategy before the start of each financial year.  The Council’s Capital Strategy 2020-21, complying with CIPFA’s requirement includes the

Prudential Indicators which in previous years were included in the TMS, along with details regarding the Council’s non-treasury investments. The Capital Strategy and TMS should be read in conjunction with each other as they are interlinked as borrowing and investments are directly impacted upon by capital plans and were approved together by Council on 26 February 2020.

She informed Council 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 Interim Chief Officer – Finance, Performance and Change 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.  In addition, a quarterly monitoring report was presented to Cabinet in July 2020.  She 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 of investments at 30 September 2020 was £64.29 million with an average interest rate of 0.24%.   

The Interim Chief Officer – Finance, Performance and Change informed Council 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.  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.  She outlined the proposed revised TMS and the proposed amendments, these amendments have been discussed with the Council’s Treasury Management Advisors.

RESOLVED:           That Council:

·         approved the Council’s 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.

approved the proposed changes to the Treasury Management Strategy 2020-21.