Agenda item

Treasury Management Mid-Year Review

Report CFM475 of the Cabinet Member for Finance.




That the Governance and Audit Committee noted and approved the contents of the mid-year review of Treasury Management activity for 2018-19.


Under the Local Government Act 2003 regulations, the Council was required to produce regular reports on treasury and debt management operations during the financial year. The Treasury Management term was used to cover the Council's borrowing and investment strategies. The report met the requirements of the CIPFA Code of Practice on Treasury Management which had been revised in 2017.


Key recommendations of the Chartered Institute of Public Finance and Accountancy (CIPFA) Code of Practice for Treasury Management in the Public Services had been formally adopted by the Council.  The Council, in line with the code, had also adopted a treasury management policy statement that required regular reports on treasury and debt management operations during the financial year.


Under Part 1 of the Local Government Act 2003, the Council was required to give due regard to the Prudential Code for Capital Finance which included the setting of Prudential Indicators. Relevant treasury management indicators had been incorporated into the Treasury Management Strategy 2018/19 which had been approved by Council on 1st March 2018. All local authorities were required to prepare a Capital Strategy report from 2019-2020.


The report provided a review of treasury management for the period ended 30 September 2018 and reviewed current developments. The following elements were also covered in the report:


·      A review of debt management operations

·      A review of investment operations

·      An economic update for the first part of the 2018-19 financial year



No additional borrowing had been required during the first half of 2018-19. All Council borrowing was with the Public Works Loans Board (PWLB). Regular reviews were undertaken to consider potential borrowing opportunities to settle the outstanding debt earlier but at a more beneficial rate. Reference was made to Appendix 8 of the report that provided detail on the Debt Maturity Analysis as at 30 September 2018.


Investment Operations

It was noted that the average size of the investment portfolio period was £78.178m for the 6 month period compared to an average portfolio size of £69.9m during the same period in 2017-18.


Reference was made to Appendix B of the report that provided further detail on the Short Term and Long Term Investments. Short term investments were for a period of a year or less and long term investments were for a period of a year or more.  Interest rates for both long and short term periods fluctuated but it was noted that overall, short term investments provided a slightly better interest rate. Instant access investments were available should funds be required.


Appendix C of the report provided further details of the external debt indicators together with the operational boundaries and it was noted that the debt portfolio did not breach the authorised limit. 


Discussion took place on the types of short term investments, whether funds could be accessed instantly and easily if required, the number of investments both inside and outside the UK and investments with local authorities.


It was noted that the short term investment totals reflected the total of a number of investments within a particular organisation it was not one investment. There were a number of accounts that provided instant access to funds should it be required and that inter authority investment was normal practice.


Further discussion took place on the how local authorities were chosen,  whether there was a league table or preferred list, the potential risks and benefits of investing in other local authorities, whether the investments were monitored on a regular basis and how the Government viewed investments with other local authorities.


The Committee was informed that there were no lists or league tables for local authorities and investments did not inform the amount of the Government Settlement.

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