Treasury Management, Annual Investment Strategy and Capital Strategy 2020/21
It was agreed to call minute 242 of Cabinet on the 10th February 2020, the ‘Treasury Management and Annual Investment Strategy and Capital Strategy 2020/21’ which is a council decision.
Councillor Chowney, Leader of the Council, proposed a motion, seconded by Councillor Batsford, that recommendations as set out in minute 241 of the Cabinet meeting on the 10th February 2020 ‘Treasury Management, Annual Investment Strategy and Capital Strategy 2020/21’ be approved.
Councillor Chowney also took the chance to thank everyone for their support, as this will be his last Budget Council meeting as Leader of the Council.
RESOLVED (by 19 votes for to 8 against) 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 2020/21 in the light of 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.
4. The Cabinet and full Council note that there is likely to be the use of Money Market Funds in 2020/21 – as already allowed for in the investment strategy.
5. Due to the previous amendments to Agenda Item ‘Revenue Budget 2019/20 Revised and 2020/21, plus Capital Programme 2020/21 – 2022/23’, there will be minor changes to the use of reserves.
The reasons for these decisions were:
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 to diversify its investments and must consider carefully the level of risk against reward against a background of historically relatively low interest rates. Investments can help to close the gap in the budget in the years ahead and thus help to preserve services, assist in the regeneration of the town, provide additional housing and enhance the long-term sustainability of the town. However, over reliance on such income streams would involve taking unnecessary risks with the future of the Council and its ability to deliver statutory services.
4. The Council has the option of using Money Market funds within its Investment Policy already. These are on occasion providing higher rates of return than some straight deposit accounts and as such the use of these funds is likely to occur in the near future.
- 1. Treasury Management Covering Report -Cabinet 10 Feb 2020, item 113a PDF 195 KB
- 2. Treasury Managment Strategy 2020-21 - Cabinet 10 Feb 2020 as at 30 Jan 2020, item 113a PDF 453 KB
- 3. Capital Strategy 2020-21 - Final, item 113a PDF 467 KB