Issue - meetings

Treasury management strategy - annual review

Meeting: 30/06/2010 - Audit and Governance Committee (Item 10)

10 Treasury Management - review of activity 2009/10 pdf icon PDF 91 KB

To consider report 17/10 of the Head of Finance. 


Councillors Richard Farrell and Mike Mackay both declared personal interests in this item.  Complying with the council’s standing order 34, they remained in the meeting for this item. 


The Committee considered report 17/10 of the Head of Finance, which reviewed treasury management activity in 2009/10.  The Chartered Institute of Public Finance and Accountancy had recommended that the council’s treasury management activity should be scrutinised by a committee other than the Executive.  The Audit and Governance Committee had this responsibility.  The Executive would consider a similar report on 2 July. 


The report highlighted the performance of cash invested by the in-house team and that managed by Investec, the council’s appointed investment manager.  Performance was also analysed by Butlers, the council’s investment adviser.  The in-house team achieved a return of 1.07 per cent, while Investec achieved 1.31 per cent.  Butlers concluded that the return on investment was lower than initially anticipated due to low interest rates.  However, Butlers did not recommended any changes to the council’s approach as this allowed a balance of top-quality investments and good liquidity. 


The committee thanked the officer for the report but asked where it showed the loss of investment in the Icelandic bank, Landsbanki.  The officer reported that this had occurred in the previous year.  The council was writing off the losses over several years although it hoped to receive compensation for the majority of the loss.  The committee considered that the report should cover both the good and bad news and recommended the Executive that the 2009/10 report should reflect the loss of investment. 


The committee congratulated the in-house team for its performance in 2009/10. 


RESOLVED  (by eight votes to nil)


(a)       To note the return of cash invested during 2009/10 and the balances of funds at 31 March 2010 and congratulate the in-house team on its performance;


(b)       To note the prospects for the return on cash investments in 2010/11; and


(c)        To recommend the Executive that treasury management reports should reflect both the good and bad news and that the 2009/10 report should reflect the loss of investment in the Icelandic bank, Landsbanki.