Issue - meetings

To consider the proposed Treasury Management Strategy statement for 2011/12 to 2013/14 to this committee prior to it being presented to Cabinet and Full Council for final approval.

Members considered this report which set out the proposed Treasury Management Strategy for financial years 2011/12 to 2013/14 in accordance with the CIPFA Treasury Management Code of Practice. The Strategy was draft pending approval of the budget.  It would progress to Cabinet on 25^th January 2011 and would also progress to Audit committee on the 3^rd February 2011. The draft included current estimates of the current capital programme and therefore was subject to change before progression to these latter meetings.

Members were asked to  note  that  short term interest rates were expected to remain at low figures,  and this meant that  there would be a “cost of carry” if funds were borrowed in advance of capital expenditure being incurred. Therefore the Council’s strategy was to keep cash balances low, and invested short term, and only borrow when required.

The report outlined  the following key changes  for the committee to note:

• Addition of Nat West and Standard Chartered to the list of UK banks available to invest with( Nat West was the  Council’s banker)
• UK Treasury Bills issued by the Debt Management Office
• Deposits with non UK Banks  - Rabobank(Netherlands), Nordea bank(Finland), BNP Paribas(France), Credit Agricole CIB(France), Credit Agricole SA(France), Svenska Handelsbanken(Sweden), Deutsche bank(Germany), Credit Suisse(Switzerland), Societe Generale(France), ING Bank(Netherlands).

Members were advised that the above listed banks were all at least A+ rated.  Investments would be under constant review and swift action could always be taken should the creditworthiness of the banks invested in become questionable.  Proposals to add deposits to non UK banks had been looked at carefully with only banks in triple A rated countries chosen.  It was clarified that these would be sterling deposits to be deposited via the London offices of these non UK banks. The creditworthiness and past performance of these non UK banks had been scrutinised and would continue to be monitored and reviewed following deposits of funds.

RESOLVED

That the proposed Treasury Management Statement for 2011/12 be recommended to Cabinet and Council for approval.