Agenda item

This report presents the Council’s Treasury Management Strategy for the

2017/2018 financial year. The Treasury Management Strategy incorporates within it the Treasury Management Policy Statement, Annual Investment Strategy and Minimum Revenue Provision Policy.

Discussion:

Members considered a report regarding the Council’s Treasury Management Strategy for the 2017/2018 financial year. The Treasury Management Strategy incorporated within it the Treasury Management Policy Statement, Annual Investment Strategy and Minimum Revenue Provision Policy.

The following issues were discussed:

·         The Council’s contract with Capita Asset Services for external

treasury management advice was due to expire at the end of February 2017. In response to a question about the possibility of a joint procurement exercise with other councils, officers advised that this had been discussed with other Kent councils but everyone had concluded that it would be better to procure individually as a joint approach would increase the value of the contract and EU procurement rules would then apply. A Member asked officers to bear in mind that when the contract came up for renewal again the procurement rules may have changed and joint procurement may be easier.

·         A Member asked what training had been provided to the Members of the Committee, given the CIPFA code required that Members with responsibility for treasury management received adequate training.  The Chief Finance Officer commented that the specification for the contract for external treasury management advice would include a minimum of two Member training sessions per year for the Committee. The possibility of this being opened up to all Members would be looked into.

·         Due to the Council’s under-borrowed position and the availability of inexpensive short term loans, the Council wished to avail itself of the opportunities offered by low interest rates to maximise its investment returns while remaining within its under-borrowed position. This represented a change from the previous policy of not borrowing in advance of need.

·         Money Market Funds (MMFs) offered enhanced returns and it was proposed to use MMFs as part of the Council’s investment portfolio. Many other councils followed the same approach. In response, a Member commented that there may be similar concerns from some Members with this proposal as with the proposal that the Council should invest in the CCLA property fund. Another Member asked how volatile these products were. Officers assured Members that they were very safe investments, although the returns were not high.

·         In response to a question about the likely risks and impact on the Council following Article 50 being triggered by the end of March as part of the UK’s exit from the EU, officers advised that any impact on the Council was likely to be a result of the wider effect on the UK economy and interest rates, as well as the possible consequences for levels of revenue support grant.

·         Noting that borrowing increased by £25m over the course of 2016/17, a Member asked if this represented an additional £25m of unplanned borrowing. Officers replied that this was not the case and this was a reference to the fact that there had been £25m more borrowing than the previous year. This was due to capital expenditure and was not seen as a matter of concern by officers.

Decision:

The Committee agreed to note the report and forward its comments on to Cabinet.