The Interim Head of Finance and S151 Officer submitted a report, the purpose of the report is to seek Council approval of:-

•            The Treasury Management Strategy 2019-20 which includes the   Treasury Management Indicators

•            the Capital Strategy 2019-20 which includes the Prudential Indicators

•            the Annual Minimum Revenue Provision Policy

•            Updated Financial Procedure Rules for incorporation within the  Constitution

The Local Authorities (Capital Finance and Accounting) (Wales) Regulations 2003 as amended contain detailed provisions for the capital finance and accounting controls including the use of capital receipts and what is to be treated as capital expenditure.

In December 2017, CIPFA published new editions of the Code of Practice on Treasury Management and the Prudential Code for Capital Finance in Local Authorities. Within the Prudential Code, there is a new requirement for authorities to produce a Capital Strategy that needs to be approved by  Council.

The key features of the proposed Treasury Management Strategy are:-

•            It is an integrated strategy where borrowing and investments are  managed in accordance with best professional practice;

•            The Council borrows money either to meet short term cash flow needs or to fund capital schemes within the capital programme but loans taken are not associated with particular assets;

•            One of the Borrowing Objectives of the Council is maintaining an under-borrowed position which means that the underlying need to borrow for capital purposes has not fully funded with loan debt. Instead the Council has Internal Borrowed using Council reserves, balances and cash flow as a temporary measure as shown in Table 3;

•            The Council is exposed to financial risks including the potential loss of invested funds and the effect on revenue of changing interest rates.

The Interim Head of Finance and S151 Officer stated that the key features of the proposed Capital Strategy are:-

1)         To set out the long term context in which capital expenditure and investment decisions are made;

 2)         To ensure that all capital and investment plans and borrowing are prudent and sustainable;

 3)         To include the prescribed Prudential Indicators for a three year rolling programme;

 4)         To give a high level overview of how capital expenditure, capital financing and treasury management activity contribute to the provision of services.

The principles of the Capital Strategy have been applied to the allocation of capital resources and schemes with the Capital Programme within the MTFS.

The Interim Head of Finance and S151 Officer then outlined the guiding principles of the Capital Strategy, as well as also expanding upon some of the main points of the Treasury Management Strategy (Appendix A to the report referred.)

Some of the main points of the Capital Strategy were detailed in Appendix B to the report and she directed Members to these accordingly.

The Capital Strategy also contained the Annual Minimum Revenue Provision 2019-20 and the Financial Procedure Rules (Appendix C), which had been updated to incorporate the new requirement to produce a Capital Strategy that is approved by Council on an annual basis. Tracked changes were shown in Appendix C reflecting the changes that had been made.

The Deputy Leader confirmed that this item had recently shared with the Corporate Overview and Scrutiny Committee who had been overall supportive of the Capital Strategy going forward, other than requiring further information in respect of allocation of monies to developments under Section 106 arrangements.

The Cabinet Member – Wellbeing and Future Generations asked if Officers had any concerns or risks they had identified in respect of the Brexit outcomes.

The Interim Chief Executive confirmed that certain Cabinet Members together with himself attended a Brexit Forum meeting just yesterday, where the Authority shared with the Forum a comprehensive list of potential risks that may have to be considered depending upon the eventual outcome of Brexit. It was also planned to submit a report to a future meeting of Cabinet on the topic of Brexit and the Council’s Risk Register.

RESOLVED:                       That Cabinet considered the report and noted   that the following will be presented to Council for approval:-

1)       the Treasury Management Strategy 2019-20 including the Treasury Management Indicators 2019-20 to 2021-22 (Appendix A to the report);

2)       the Capital Strategy 2019-20 including the Prudential Indicators 2019-20 to 2021-22 (Appendix B);

3)        the Annual Minimum Revenue Provision(MRP)Statement 2019-20 (Appendix B – Schedule A)

4)          the amendments to the Financial Procedure Rules  Appendix C) and consequently the updated Constitution as set out in Appendix D.