Issue - meetings

Consideration was given to the report presented by the Assistant Director, Finance and Corporate Services, that outlined a mid-year treasury review.

The review, as set out in the Appendix submitted, highlighted the key changes to the Council’s capital activity (the PIs) and the actual and proposed treasury management activity (borrowing and investment).

With regard to investments, the primary governing principle remained security over return and the criteria for selecting counterparties continued to reflect this.

Overall borrowing remained fairly constant over the period covered by the report.  The Council would remain under-borrowed against the borrowing requirement due to the cost of carrying debt and new borrowing would only be taken up as debt matured.  This was in line with financial assumptions.

The report showed that the underlying economic and financial environment remained difficult for the Council, foremost being the improving but still challenging concerns over investment counterparty risk.  This background encouraged the Council to continue maintaining investments short term and with high quality counterparties.  The downside of such a policy was that investment returns remained low.  The governing principle remained security over return and the criteria for selecting counterparties continued to reflect this.

The ‘call’ account with the top-rated bank Handlesbanken who met the Council’s highest investment criteria was being used in a prudent and cautious manner to improve the expected returns for the year.

To meet regulatory requirements the report would be submitted to the Cabinet and Commissioners’ Decision Making meeting and to full Council. 

Resolved:-  (1)  That the report be noted.

(2)  That the report be referred to the Cabinet and Commissioners’ Decision Making Meeting to consider recommending Council approve the changes to the 2016/17 Prudential Indicators.