The Head of Finance and Section 151 Officer reported on an update on the mid-year review and half year outturn position for Treasury Management activities, Treasury Management and Prudential Indicators for 2017-18 and also highlighted compliance with the Council’s policies and practices. 

He reported that in order to ensure the effective scrutiny of treasury management in accordance with the Treasury Management Strategy, this Committee had been nominated to be responsible for ensuring effective scrutiny of the treasury management strategy and policies.  He informed the Committee that the Council has complied with its legislative and regulatory requirements during the first half of 2017-18.  He informed the Committee that the Treasury Management Strategy 2017-18 and Half Year Outturn were reported to Council on 1 March 2017 and 1 November 2017 and in addition, the quarterly monitoring report was presented to Cabinet in July 2017. 

The Head of Finance and Section 151 Officer reported on a summary of the Treasury Management Activities for the first half of 2017-18 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 long term borrowing in 2017-18.  He stated that £2m short term borrowing was taken on 24 May 2017 for cash-flow purposes, which had been repaid on 5 June 2017.  He informed the Committee that favourable cash flows had provided surplus finds for investment, with the balance on investments at 30 September 2017 of £44m, with an average rate of interest of 0.48%. 

The Head of Finance and Section 151 Officer also reported that the Council is diversifying into more secure and / or higher yielding asset classes during 2017-18 and in order to be able to use the majority of these different types of instruments, the Council is required to use a nominee account(s) with a third party for safe custody of such instruments in a custody account.  Following approval by Cabinet on 5 September 2015, the Council opened a custody account with King & Shaxson.  The Council also opened an account with the CCLA Public Sector Deposit Fund in August 2017 which is a pooling of public sector deposits wholly aligned with the principles and values of the public sector. 

The Head of Finance and Section 151 Officer reported that the 2011 Treasury Management Code and Prudential Code require the Council to set and report on a number of Treasury Management and Prudential Indicators. He stated that the indicators either summarise the expected activity or introduce limits upon the activity, and reflect the underlying capital programme. 

The Committee referred to the recent announcement by the Bank of England of an increase in the Bank Rate which was at variance with the forecast made by Arlinglcose, the Council’s Treasury Management advisors who predicted that the Bank rate would remain at 0.25%.  The Head of Finance and Section 151 Officer stated that Arlingclose had predicted that an increase in the Bank Rate was unlikely at the time the report was written but this had not proved to be the case. 

RESOLVED:           That the Committee noted the Annual Treasury Management Activities for 2017-18 for the period 1 April 2017 to 30 September 2017 and the projected Treasury Management and Prudential Indicators for 2017-18 which were all reported to Council for approval on 1 November 2017.