Issue - meetings

Treasury Management Mid Year Review 2017/18

Meeting: 20/11/2017 - Audit, Governance and Standards Committee (Item 58)

58 Treasury Management Mid Year Review 2017/18 pdf icon PDF 71 KB

Additional documents:

Minutes:

The Committee considered the report of the Head of Finance setting out details of the activities of the Treasury Management function for the first six months of the financial year 2017/18 in accordance with CIPFA’s Code of Practice on Treasury Management in Local Authorities in the context of the current economic environment.  It was noted that:

 

·  In accordance with the Council’s Investment Strategy for 2017/18, the maximum principal sum to be invested for a period exceeding 364 days had been reduced from £8m to £5m.  This was consistent with the borrowing strategy to utilise cash balances rather than loan debt to finance the Capital Programme in the short term due to low investment returns and high counterparty risk in the current economic climate.

 

·  The Council had used a diverse range of highly rated institutions as set out in the counterparty list to invest its funds.  All new investments during the first six months of 2017/18 were short term (less than a year) making them readily available when required.  Total investments as at 30 September 2017 were £26.455m.  Investment rates had remained low during this period; the average rate on the Council’s investments was 0.42% and investment income totalled £106k.  There had been no requirement to borrow during this period.

 

·  During the financial year 2017/18 to date, the Council had operated within the Prudential and Treasury Indicators set out in the Treasury Management Strategy Statement and in compliance with the Council’s Treasury Management Practices.

 

·  The Prudential Indicators showed actual capital expenditure of £6.195m as at 30 September 2017, and this was fully funded.  The Capital Financing Requirement (CFR) measured the Council’s need to borrow for a capital purpose.  A negative figure showed that the Council had more than sufficient reserves to fund its capital programme at this point.  It was anticipated that the Council would have a negative CFR figure by the end of the year; it was currently £99k.

 

In response to a question, the Finance Manager explained that three investments had matured recently, and the funds had been re-invested short term (less than one year).

 

RESOLVED:

 

1.  That the position with regard to the Treasury Management Strategy as at 30 September 2017 be noted.

 

2.  That no amendments to the current procedures are necessary as a result of the review which has been undertaken of the activities of the Treasury Management function in 2017/18 to date.