Issue - meetings

The Chair of the Committee, Councillor Dyke, to MOVE the Minutes of the meeting held on 16 November 2016.

RECOMMENDATION that the Minutes be adopted in accordance with Standing Orders.

NOTE:  The Authority’s approved Treasury Management Strategy (as underpinned by the Chartered Institute of Public Finance and Accountancy’s (CIPFA) Treasury Management in Public Services Code of Practice) provides, amongst other things, for the Authority to receive an annual Treasury Management Strategy Statement (including the Annual Investment Strategy and Minimum Revenue Provision Policy) for the year ahead, together with a mid-year review and an annual stewardship report covering activities during the previous year.

Report RC/16/13 (Treasury Management Performance 2016-17:  Quarter 2), as referred to at Minute *RC/10 of the Minutes of the Resources Committee meeting held on 16 November 2016, represents the mid-year review report and is appended to the Resources Committee  Minutes for information.

The Chair of the Committee, Councillor Dyke, MOVED the Minutes of the meeting held on 16 November 2016 which had considered, amongst other things:

·         a report on Treasury Management performance for the organisation up to and including the second quarter of the current (2016-17) financial year.  (NOTE:  a copy of the report [RC/16/13] as considered by the Resources Committee was appended to the Minutes of the meeting for information);

·         a report on financial performance for the second quarter of the current financial year as against the approved revenue and capital budgets for that year; and

·         an update report on progress with the Estates Development Review.

RESOLVED that the Minutes be adopted in accordance with Standing Orders.

Report of the Treasurer to the Authority (RC/16/13) attached.

The Committee received for information a report of the Treasurer (RC/16/13) that set out details of the treasury management performance for the second quarter of 2016 (to September 2016) as compared to the agreed financial targets for 2016/17.

Adam Burleton, representing Capita – the Authority’s Treasury Management Adviser – was present at the meeting and he gave an overview of the performance to date as measured against the approved Treasury Management Strategy.  He made reference to the following points:

·        Post Brexit, the interest rate forecast had been reviewed and the bank rate had been reduced to 0.25% with interest rates expected to remain low until at least June 2019;

·        The Authority was outperforming the 3 month LIBID benchmark return of 0.308% with investment interest at £60,696k (0.46%) in quarter 2;

·        There had been no additional external borrowing undertaken with the debt reducing slightly to £25.790m.  The Authority was maintaining its prudential approach to investment decisions with priority being given to liquidity and security over yield and no prudential indicators had been breached.

It was noted that the concern for the UK economy was that post Brexit, the cost of imported goods was starting to rise due to the drop in the value of sterling and the forecast for the Consumer Price Index was an increase to 3%, possible going to as high as 4%.  With wage rises not increasing at the same rate, this may result in an earlier increase in interest rates in order to curb inflation.

Reference was made to the position in respect of the impending Government cuts to the Revenue Support Grant (RSG) to local authorities and the need for this Authority to continue to be ultra cautious in future.  The Treasurer reported that the Government had issued a consultation document recently that made reference to the move towards self-sufficiency for local authorities and the question had been asked as to whether fire authorities should remain within this system.