Issue - meetings

The Deputy Leader of the Council and Cabinet Member (Finance and Human Resources) submitted a report setting out the suggested Strategy for 2017/2018 in respect of the following aspects of the Treasury Management function.  The Strategy is based upon the Treasury officers’ views on interest rates, supplemented with leading market forecasts provided by the Council’s treasury advisor. The Strategy covers:

·       Capital plans and prudential indicators;

·       the minimum revenue provision policy;

·      the current treasury position;

·      treasury limits in force which will limit the treasury risk and activities of the Council;

·      prospects for interest rates;

·      the borrowing strategy;

·      policy on borrowing in advance of need;

·      debt rescheduling;

·      the investment strategy;

·      creditworthiness policy; and

·      policy on use of external service providers.

The primary objective of the Council’s Treasury Management function will continue to be the minimisation of financing costs whilst ensuring the stability of the Authority’s long term financial position by borrowing at the lowest rates of interest and by investing surplus cash to earn maximum interest, all at an acceptable level of risk.

The overall strategy for 2017/2018 will be to finance capital expenditure by running down cash/investment balances and using short term temporary borrowing rather than more expensive longer term loans. The taking out of longer term loans (1 to 10 years) to finance capital spending will only then be considered if required by the Council’s underlying cash flow needs. Some long term loans (over 10 years) may be undertaken to replace debt which matures in the year. With the reduction of cash balances the level of short term investments will fall. Given that investment returns are likely to remain low the financial year 2017/2018, then savings will be made from running down investments rather than taking out more expensive long term loans.

All prospects for rescheduling debt will be considered, in order to generate savings by switching from high costing long term debt to lower costing shorter term debt.

Delegated decision:

That approval be given to the submission of the following to Council for consideration:-

·         Prudential Indicators Forecast for 3 years.

·         Treasury Management Strategy 2017/2018.

·         Minimum Revenue Provision Policy for 2016/2017.

·         Scheme of Delegation and Responsibility as set out in Appendices 2 and 6 of the report submitted.

Recommendation to Council:

That approval be given to the recommendations made in the report.

Reasons for the decision:

It is a requirement of the CIPFA Code that the Council receives an annual treasury management strategy report.

Other options considered and rejected:

To reject the recommendations.