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Treasury Management Strategy Statement 2020/21 and Prudential Indicators 2020/21 to 2022/23

Meeting: 29/01/2020 - Audit Committee (Item 433)

433 Treasury Management Strategy Statement 2020/21 and Prudential Indicators 2020/21 to 2022/23 pdf icon PDF 168 KB

The ATTACHED report provides the Committee with the:

a)    Treasury Management Strategy 2019-2020 and prudential indicators 2019/20 to 2021/22.

b)    Minimum Revenue Provision (MRP) policy statement set out in paragraph 4.5 of the Treasury Management Strategy 2020/21 (Appendix 1)

c)    Annual Investment Strategy set out in section 6 of the Treasury Management Strategy 2020/21 (Appendix 1)

For review prior to recommendation to Council for approval.

Additional documents:

Minutes:

The report provided the Committee with details of the proposed Treasury Management Strategy for 2020/21 and the prudential indicators for the years 2020/21 to 2022/23.  This would be put to Council in February with the mid-term report which had been received at the July 2019 meeting of the Audit Committee.

 

Officers noted that, with the change last year to the European Union Markets in Financial Instruments Directive (MIFID), the council had resolved to act as a professional client to allow it to continue interacting with these counterparties and products.  This had been effective and the Council intended to retain this status.  This required that the decision was reviewed on an annual basis and agreed.  The Committee confirmed that they wished this to continue.

 

The Council continued to operate at a low risk with minimal borrowing.  Officers were reviewing the Council’s Treasury Management Practices with regards to commercial activities and non-treasury investments.  These would be brought back to the Committee later in the year.

 

The Council continued to have a negative borrowing position, benefiting from a net return on investments, however it was recognised that this would change.  It was currently more financially advantageous to borrow internally rather than to borrow to invest.  The maximum current borrowing limits therefore reflected the options available for when the council chose to borrow.  The Council criteria for investments as a whole broadly remained: Security, Liquidity, Return.

 

The Committee discussed the information available and whether to hold a training session prior to the next Audit Committee meeting in March.  Officers agreed to schedule this with the invitation extended to all Members with an emphasis on those engaged with the Council’s owned companies.

 

With the change in the corporate structure the potential appointment of a Section 151 Officer, separate from the Managing Director to minimise risks and conflict and balance workloads, was raised.  It was recognised that some councils separated out statutory roles, others had a combined post and that both options had been shown to be viable when audited.  The Committee asked that an update on the arrangements be given to the next meeting.

 

RESOLVED that:

1)    The content of the Treasury Management Strategy 2020/21 and Prudential Indicators 2020/21 to 2022/23, attached at Appendix 1, be recommended to Council for approval.

2)    The Minimum Revenue Provision (MRP) policy statement, detailed in paragraph 4.5 of the Treasury Management Strategy 2020/21, be recommended to Council for approval.

3)    The Annual Investment Strategy, set out in section 6 of the Treasury Management Strategy 2020/21, be recommended to Council for approval.

4)    That the Council should continue to elect to act as a professional client for the purposes of the European Union Markets in Financial Instruments Directive (MIFID).