Issue - meetings

This report represents the mid year review of the Treasury Management Strategy 2015/16 and has been considered by the Audit Committee on 24 September 2015 and the Cabinet on 29 September 2015. The report also proposes a change to the strategy to include property funds in the list of approved investments for consideration and approval.

Discussion:

This report provided details of the mid year review of the Treasury Management Strategy 2015/16 which had also been considered by the Audit Committee on 24 September 2015 and the Cabinet on 29 September 2015. The report also proposed a change to the strategy to include property funds in the list of approved investments.

The Leader of the Council, Councillor Jarrett, supported by the Portfolio Holder for Resources, Councillor Gulvin, proposed the recommendations set out in the report.

Decision:

a)    The Council noted the mid-year review of the Treasury Management Strategy 2015/16, as set out the report.

b)    The Council agreed that the Treasury Management Strategy be revised to add property funds to the list of non-specified investments, subject to a £5m counter-party limit for such investments and any investments being made in consultation with the Portfolio Holder for Resources and The Leader.

Background:

This report presented the mid-year review of the Treasury Management Strategy 2015/2016, which had been approved by Full Council alongside the Capital and Revenue Budgets on 26 February 2015.

The report included an economic update for the first six months of 2015/2016 and reviewed the Treasury Management Strategy Statement and Annual Investment Strategy; the Council’s investment portfolio and borrowing strategy for 2015/2016; and, compliance with Treasury and Prudential Limits for 2015/2016.

Proposals to include property funds in the list of approved investments contained within the Strategy were set out in the report. It was noted that such funds, comprising a strong portfolio of high quality properties with good quality reliable tenants, were generally able to provide consistent annual yields; even when capital asset values fluctuated due to market conditions.  Property funds of the type approved by HM Treasury were also relatively liquid and units could be bought or sold fairly quickly to respond to significant changes in the Council’s cashflow forecasts. This proposal would need to be referred to Full Council for approval.

It was noted that the Audit Committee had considered the mid-year review on 24 September 2015 and details of the Committee’s consideration were set out within Supplementary Agenda No.1. The Committee had recommended the mid-year review to Cabinet and that the proposed inclusion of property funds to the list of non-specific investments be subject to a £5m counter party limit, in order to manage risk. Further detailed information to the CCLA Local Authorities Property Fund would be included in the report to Council.

Reasons:

In accordance 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.