Issue - meetings

To approve and adopt the prudential indicators and limits for 2016/17 to 2018/19, the Minimum Revenue Provision Policy Statement, Treasury Management Strategy for 2016/17 to 2018/19 and Investment Strategy 2016/17 to 2018/19.

Further to Minute No. 31 of the Cabinet/Commissioners’ Decision Making Meeting held on 23^rd February, 2016 consideration was given to the report which presented the Local Government Act 2003 and supporting regulations which required the Council to ‘have regard to’ the CIPFA Prudential Code and the CIPFA Treasury Management Code of Practice and prepare, set and publish prudential indicators and treasury indicators that ensured the Council’s capital expenditure plans and affordable, prudent and sustainable in the long-term.

The Prudential Indicators and Treasury Management Strategy together formed part of the process which ensured the Council met the balanced budget requirement under the Local Government Finance Act 1992. 

The report set out the proposed Treasury Management Strategy Statement and Borrowing Limits for 2016/17 and Prudential Indicators for 2016/17 to 2018/19 and had been presented to the Audit Committee in furtherance of its delegated role of scrutiny on Treasury matters, including the Treasury Management Strategy and related policies. 

In accordance with the Prudential Code for Capital Finance, the Secretary of State’s Guidance on Local Government Investments, CIPFA’s Code of Practice for Treasury Management in Local Authorities and with Council policy, the (Interim) Strategic Director of Finance and Customer Services was required, prior to the commencement of each financial year to seek the approval of the Council to the following:-

i.      The Prudential Indicators and Limits for 2016/17 to 2018/19

ii.      A Minimum Revenue Provision (MRP) Statement which sets out the Council’s policy on MRP

iii.     An Annual Treasury Management Strategy in accordance with the CIPFA Code of Practice on Treasury Management including the Authorised Limit

iv.     An Investment Strategy in accordance with the Department for Communities and Local Government (CLG) investment guidance

Albeit a technical and complex report the key messages were:-

a.     Investments – the primary governing principle would remain security over return and the criteria for selecting counterparties reflected this. Cash available for investment would remain low, resulting in low returns;

b.     Borrowing – overall, this would remain fairly constant over the period covered by this report and the Council would remain under-borrowed against its borrowing requirement due to the higher cost of carrying debt.  New borrowing would only be taken up as debt matures; and,

c.     Governance – strategies were reviewed by the Audit Committee with continuous monitoring which included Mid-Year and Year End reporting.

Councillor C. Vines sought clarification on the fluidity of the documentation and progress and was advised by the Leader that this document would follow the normal democratic route through Cabinet and any updates formally agreed and approved.

Resolved:-  (1)  That prudential indicators and limits for 2016/17 to 2018/19 contained in the report be approved.

(2)  That the Minimum Revenue Provision Policy Statement contained in Appendix A which sets out the Council’s policy be approved.

(3)  That the Treasury Management Strategy for 2016/17 to 2018/19 and the Authorised Limit Prudential Indicator be approved.

(4)  That the Investment Strategy for 2016/17 to 2018/19 be approved.

Mover:-  Councillor Alam  ...  view the full minutes text for item 147

To consider and recommend to Council approval of the prudential indicators and limits for 2016/17 to 2018/19, the Minimum Revenue Provision Policy Statement, Treasury Management Strategy for 2016/17 to 2018/19 and Investment Strategy 2016/17 to 2018/19.

Report of the Interim Strategic Director of Finance and Corporate Services

Cabinet Member – Councillor Alam

Commissioners:  Myers/Ney (in advisory role)

Recommended:-  That Council be asked to:-

i.                    Approve the prudential indicators and limits for 2016/17 to 2018/19 contained in the report.

ii.        Approve the Minimum Revenue Provision Policy Statement contained in Appendix A which sets out the Council’s policy.

iii.        Approve the Treasury Management Strategy for 2016/17 to 2018/19 and the Authorised Limit Prudential Indicator.

iv.       Approve the Investment Strategy for 2016/17 to 2018/19.

Consideration was given to a report presented by Councillor Alam, Cabinet Member for Corporate Services and Finance, which detailed how the Local Government Act 2003 and supporting regulations required the Council to ‘have regard to’ the CIPFA Prudential Code and the CIPFA Treasury Management Code of Practice and prepare, set and publish prudential indicators and treasury indicators that ensured the Council’s capital expenditure plans were affordable, prudent and sustainable in the long-term.

The Prudential Indicators and Treasury Management Strategy together formed part of the process which ensured the Council met the balanced budget requirement under the Local Government Finance Act 1992. 

The report, therefore, set out the proposed Treasury Management Strategy Statement and Borrowing Limits for 2016/17 and Prudential Indicators for 2016/17 to 2018/19 and had been presented to Audit Committee in furtherance of its delegated role of scrutiny on Treasury matters, including the Treasury Management Strategy and related policies. 

In accordance with the Prudential Code for Capital Finance, the Secretary of State’s Guidance on Local Government Investments, CIPFA’s Code of Practice for Treasury Management in Local Authorities and with Council policy, the (Interim) Strategic Director of Finance and Customer Services was required, prior to the commencement of each financial year, to seek the approval of the Council to the following:-

i.      The Prudential Indicators and Limits for 2016/17 to 2018/19.

ii.      A Minimum Revenue Provision (MRP) Statement which set out the Council’s policy on MRP.

iii.     An Annual Treasury Management Strategy in accordance with the CIPFA Code of Practice on Treasury Management including the Authorised Limit.

iv.     An Investment Strategy in accordance with the Department for Communities and Local Government (CLG) investment guidance.

Albeit a technical and complex report the key messages were:-

a.     Investments – the primary governing principle would remain security over return and the criteria for selecting counterparties reflected this. Cash available for investment would remain low, resulting in low returns;

b.     Borrowing – overall, this would remain fairly constant over the period covered by this report and the Council would remain under-borrowed against its borrowing requirement due to the higher cost of carrying debt.  New borrowing would only be taken up as debt matures; and,

c.     Governance – strategies were reviewed by the Audit Committee with continuous monitoring which included Mid-Year and Year End reporting.

Stuart Booth, Interim Strategic Director for Finance and Corporate Services, confirmed the strategies are largely unchanged from previous years, but gave his assurance that; the prudential indicators required by statute fully took account of the Council’s Capital plans; the revenue implications were fully contained within the proposed Revenue Budget; with regard to investments the governing principle continued to be security over return; the Council would remain under-borrowed against the borrowing requirement due to the higher cost of carrying debt; and governance of the strategies was through regular reporting to the Audit Committee.

Recommended:-  That Council be asked to:-

i.                    Approve the prudential indicators and limits for 2016/17 to 2018/19 contained in the report.

ii.        Approve the Minimum Revenue Provision  ...  view the full minutes text for item 31