Issue - meetings

To receive and consider report 102/09 of the Head of Finance (attached).

(Time: 2.54pm to 2.58pm)

The Executive received and considered report 102/09 of the Head of Finance.  This set out a draft treasury management and investment strategy to cover the period 2010/11 to 2012/13.  The Executive was asked to recommend adoption of the strategy to the Council. 

The report outlined the council’s treasury management prudential indicators for 2010/11 and set out the expected treasury operations, fulfilling legislative requirements as follows:

·        The reporting of the prudential indicators, setting out the expected capital activities. 

·        The treasury management strategy statement set out how the council’s treasury service would support the capital decisions taken in the budget report, the day-to-day treasury management, and the limitations on activity through treasury prudential indicators.  The key indicator was the authorised limit, the maximum amount of debt the council could afford in the short term, but which would not be sustainable in the longer term. 

·        The investment strategy set out the council’s criteria for choosing investment counterparties and limiting exposure to the risk of loss. 

Tabled at the meeting was an amendment to the report.  Butlers, the council’s investment advisor, on seeing the draft strategy had recommended that:

• The “standard and poor” long-term rating for good quality banks should be amended to A- to be consistent with other ratings in paragraph 23 of the draft strategy.

• The ratings for lower category institutions should be tightened and a new reference should be added for unrated institutions to show a monetary limit of £3M and a time limit of 6 months.  Paragraph 26 of the draft strategy was amended to reflect these recommendations. 

The portfolio holder for finance recommended the strategy, as amended.  The Executive welcomed the draft strategy and recommended its adoption to the Council on 17 February 2010. 

R E C O M M E N D E D 

that the Council approves each of the following key elements of report 102/09:

(a)       the Treasury Management Strategy 2010/11 to 2012/13 (appendix A to these minutes), and the treasury Prudential Indicators contained within the strategy (paragraph 36);

(b)       the Authorised Limit Prudential Indicator as shown in paragraph 6 of the strategy;

(c)        the Investment Strategy 2010/11 contained in the treasury management strategy (Appendix A), and the detailed criteria included in Annex A1;

(d)       the revision to the council’s Financial Regulations as at Annex A3 and consequential amendments to the constitution.  This nominates the Audit and Governance Committee to ensure effective scrutiny of the treasury management strategy and policies.