Agenda item

Oladapo Shonola, Head of Finance - Pensions & Treasury, introduced the report as set out.

The following arose during discussion of the report:

a.         The level of borrowing was around £250m, with around £200m for the Housing Revenue Account.  The average rate of borrowing was 4.9%, and for the current financial year this equated to £14.5m, which was in line with what had been agreed at the start of the financial year.

b.         The Lender’s Option Borrower’s Option (LOBO) loans were taken on at a time when rates were favourable, and auditors had concluded that the Council had not lost out as a result of taking a LOBO loan over a government loan, as the rate of borrowing would have been the same. 

c.         Internal borrowing was where cash reserves were used in place of external borrowing, and this was used when the interest on investment would be far lower than the interest paid on borrowing.  Another option was short-term borrowing, for a period of up to three months, where necessary. 

d.         Corporate Committee received regular updates on the status of borrowing and investments.

e.         The decision on which Counterparty to include on the approved list was based mainly on credit criteria, but also on other criteria, in conjunction with treasury advisors.  The length of investment was guided by the treasury management strategy, and combined, these helped to mitigate risk of investments.

f.          Members raised questions regarding the monitoring of any borrowing and risks as a result of any external development vehicles.  Councillor Arthur explained that in the event of any development vehicle, the Council would have a 50% share, and therefore measures would be put in place to monitor risks and investments.  Members requested further information on the impacts on current income streams and the projected income of the Haringey Development Vehicle.  Members also referred to the Housing Revenue Account, and questioned what the position would be if the HDV went ahead.  Councillor Ibrahim suggested that it would be appropriate for this information to be fed back to the Housing and Regeneration Scrutiny Panel as part of their review of the HDV.

g.         The Committee requested that a meeting take place with the Chair of Corporate Committee, and it was noted that a meeting had been scheduled to take place in March to consider the Annual Audit Plan 2017/18 ahead of activities to develop the 2017/18 scrutiny work programme.

The Committee discussed a number of recommendations and it was 

RESOLVED that

i.          the report be noted;

ii.         a meeting take place between the Chair of Corporate Committee and Overview and Scrutiny Committee to discuss any issues;

iii.        Corporate Committee be requested to keep the Lender’s Option Borrower’s Option (LOBO) under review and take action where appropriate to reduce any risk to the Council;

iv.       Corporate Committee be requested to take responsibility for the oversight of the Council’s 50% share of any potential future development vehicle in terms of any financial investments; and

v.         Further information on the potential impact of a Development Vehicle on the Housing Revenue Account be provided to the Housing and Regeneration Scrutiny Panel.