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Issue - meetings
Treasury Management, Annual Investment Strategy and Capital Strategy 2021/2022
Meeting: 21/01/2021 - Audit Committee (Item 101)
101 Treasury Management, Annual Investment Strategy and Capital Strategy 2021/2022 PDF 214 KB
Additional documents:
- Appendix (i) Treasury Management Strategy 2021/22, item 101 PDF 944 KB
- Appendix (ii) Capital Strategy 2021-22, item 101 PDF 488 KB
Minutes:
The Assistant Director, Financial Services and Revenues, presented a report to consider the draft Treasury Management Strategy, Annual Investment Strategy, Minimum Revenue Provision (MRP) Policy and Capital Strategy and make recommendations to full Council as appropriate. This is to ensure that there is an effective framework for the management of the Council's investments, cash flows and borrowing activities prior to the start of the new financial year.
The Council is expected to have some £64.69 million of debt (as at 31 March 2021), and investments which can fluctuate between £15m and £30m in the year. The level of debt is set to increase to some £92m by 2022/23.
The Assistant Director said that the Covid-19 pandemic had changed the economic environment, including interest rates and inflation rates. The strategy outlines that the Council will continue to diversify investments at the same levels, repay debt in the right way, and keep the financial rules of the Council under review.
The Chair thanked the finance team for their work on the strategy.
The Chair asked about the Country Park Visitor Centre project. The Assistant Director said that the project should be completed in the current financial year, save for operational costs. The agreement to expand the budget for the project is primarily a result of the main contractor leaving the scheme and the Covid-19 pandemic.
In response to a question about the York Buildings project the Assistant Director explained that as Public Works Loan Board interest rates have decreased the revenue costs of the scheme have reduced, even though the capital expenditure has increased. This means the scheme should breakeven. There is also the possibility of external funding which may reduce the Council’s liability even more. The scheme will help alleviate the town’s acute housing needs.
RESOLVED (unanimously):
Audit Committee recommend to Cabinet and full Council that:
1. The Council approve the Treasury Management Strategy, Minimum Revenue Provision (MRP) Policy, Annual Investment Strategy, and the Capital Strategy.
2. The strategies listed are updated as necessary during 2021/22 in the light changing and emerging risks and the Council’s evolving future expenditure plans.
3. The Financial Rules and the Financial Operating Procedures of the Council are reviewed and revised as necessary to meet the requirements of the Code of Practice.
Reasons
1. The Council seeks to minimise the costs of borrowing and maximise investment income whilst ensuring the security of its investments. The Council continues to make substantial investments in commercial property, housing and energy generation initiatives, and this will continue to involve the Council in taking on additional borrowing.
2. The sums involved are significant and the assumptions made play an important part in determining the annual budget. The CIPFA Treasury Management Code of Practice (2017 Edition), adopted by the Council last year, was released to take account of the more commercialised approach being adopted by councils and the enhanced levels of transparency required. The Code represents best practice and helps ensure compliance with statutory requirements.
3. The Council has the ability ... view the full minutes text for item 101
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