Agenda item

(Cabinet Member with Special Responsibility Councillor Thomas)

Report of the Corporate Director (Finance and Performance) and Head of Financial Services to follow. 

(Cabinet Member with Special Responsibility Councillor Thomas)

The Head of Financial Services submitted a report setting out the position regarding the 2010/11 to 2012/13 Treasury Management Strategy for Cabinet’s approval.  The report also informed Members that, further to the difficulties experienced in the Icelandic banking collapse and the wider banking crisis generally, the CIPFA Code of Practice on Treasury Management was updated in November 2009 and, as a result, several specific changes had been made. The report therefore recommended that the updated Code be adopted by the Council and that the Treasury Management Policy Statement, attached to the report as Appendix B, and the Treasury Management Strategy for the period 2010/11 to 2012/13, attached to the report as Appendix C, be approved.  

The options, options analysis, including risk assessment and officer preferred option, were set out in the report as follows:

As part of the adoption of the updated CIPFA Code of Practice on Treasury Management it is a statutory requirement that the Authority has aTreasury Management Strategy Statement and Investment Strategy.  In this regard, Cabinet may put forward alternative proposals or amendments to the proposed documents, but these would have to be considered in light of legislative, professional and economic factors, and importantly, any alternative views regarding the Council’s risk appetite.  As such, no further options analysis is available at this time.

Furthermore, the Strategies must fit with other aspects of Cabinet’s budget proposals, such as investment interest estimates and underlying prudential borrowing assumptions, feeding into Prudential and Treasury Management Indicators.  It should be noted that the Prudential Indicators will also be covered in the Budget report, elsewhere on this agenda.

The Officer Preferred Options are as reflected in the recommendations to the report.  This is based on the Council having a low risk appetite regarding investments, and it takes into account the requirements of the new Code.

Councillor Thomas proposed, and Councillor Langhorn seconded:-

“That the recommendations in the report be approved.”

Members then voted: -

Resolved unanimously:

(1)               That Council be recommended to adopt the updated Code of Practice as reflected in Appendix A of the report.

(2)               That Council be recommended to approve the Treasury Management Policy Statement as set out at Appendix B of the report.

(3)               That Council be recommended to approve the Treasury Management Strategy for the period 2010/11 to 2012/13 as set out in Appendix C of the report, incorporating the Investment Strategy and Treasury Management Indicators, and as updated for Cabinet’s final budget proposals.

Officers responsible for effecting the decisions:

Corporate Director (Finance and Performance). 

Head of Financial Services. 

Reasons for making the decision:

The CIPFA Code of Practice on Treasury Management was adopted by Council in 2002 and has now been updated. It is a requirement of the CIPFA Code of Practice on Treasury Management that a strategy outlining the expected treasury activity for the forthcoming 3 years is adopted and that this be reviewed at least annually. The strategy is based on the Council having a low risk appetite regarding investments, and it takes into account the requirements of the new Code of Practice on Treasury Management.