Issue - meetings

On 21 February 2013, Full Council approved the 2013/14 Treasury Management Strategy.  As part of that strategy and in line with the Chartered Institute of Public Finance Accountancy’s (CIPFA) code of Practice for Treasury Management, there should be a review of that strategy at least half yearly.  This report is the mid year review of the Treasury Management Strategy 2013/14

Discussion:

This report provided details of the mid year review of the Treasury Management Strategy 2013/2014. This included the management of the local authority’s investments and cash flows, its banking, money market and capital market transactions, the effective control of the risks associated with those activities and the pursuit of optimum performance consistent with those risks.

This report had been considered by the Audit Committee on 26 November 2013 and Cabinet on 17 December 2013.

The Portfolio Holder for Finance and Deputy Leader, Councillor Jarrett, supported by the Leader of the Council, Councillor Rodney Chambers, proposed the recommendation set out in the report.

Decision:

The Council noted the report.

Background:

This report provided details of the mid year review of the Council’s Treasury Management Strategy. This had been prepared in compliance with the Chartered Institute of Public Finance and Accountancy’s (CIPFA) Code of Practice on Treasury Management and covered the following:

• An economic update for the first six months of 2013/14;
• A review of the Treasury Management Strategy Statement and Annual Investment Strategy;
• A review of the Council’s investment portfolio for 2013/14;
• A review of the Council’s borrowing strategy for 2013/14;
• A review of any debt rescheduling undertaken during 2013/14; and
• A review of compliance with Treasury and Prudential Limits for 2013/14.

The report considered the circa £23million that was externally managed by Investec Asset Management. It was noted that the performance of the portfolio to 30 September 2013 had been poor, with a loss from 31 March 2013 of 0.063%. Comparable investment performance data also highlighted that the in-house team had outperformed Investec Asset Management in nine out of the last ten years.

The Audit Committee had considered the report on 6 December 2012 and its views were set out in the report. It was noted that the Committee had supported the controlled withdrawal of funds to the in-house team, which with support from the Council’s financial advisor Sector would minimise the risk of further losses. At the request of the Committee, the report provided further information as to the capacity of the in-house team to expand its portfolio.

Reasons:

The Treasury Management Strategy requires that Cabinet and Council receives and considers a mid year review of treasury management strategy and performance. The performance of the external fund manager has consistently failed to meet that achieved by the in-house team. The transfer therefore presents better value of money.