Agenda item

The Committee considered the Treasury Management Strategy Statement 2018/19 - 2020/21. Thomas Skeen, Head of Pensions introduced the report; OSC was requested to scrutinise and make comments prior to its submission to Corporate Committee and then Full Council for final approval. The following points were raised in discussion of the report.

• The Committee sought assurances around the operational boundary, and whether the current level of headroom was reasonable.
• The Committee sought clarification on cash flow levels and sought assurances that the Council had suitable cash flow available.
• The Committee sought assurances on revenue reserve levels, and whether there was enough flexibility to cover investment losses, should these occur.
• The Committee questioned existing debt levels of £346m and the revenue costs of servicing this debt.
• The Committee queried whether the authority was overly prudent in keeping its overall borrowing levels relatively low and questioned what the implications were of borrowing more.
• The Committee also queried what the Council’s liquidity levels were.  In response, officers advised that the bottom line was £10m, as this figure was mandated by the EU Markets in Financial Instruments Directive. The Committee also noted that in general, liquidity levels were subject to in-month fluctuations.
• Clarification was sought on the cost associated with servicing debt, it was agreed these would be circulated outside of the meeting. (Action: Thomas Skeen).
• The Chair of the Children and Young People’s Panel sought assurances of the Council’s ethical investment as part of its treasury/pension strategy.  In response, officers advised that the investments strategies for the pension fund and for treasury management purposes differed significantly due to the timescales involved in managing these investments.  The Committee noted that the pension fund’s investments covered a far longer period, whereas the Council’s treasury investments were done with liquidity and access to funds over the short term in mind.
• The Committee sought assurances around what the governance arrangements for the TMSS were, and what would happen if there was a change in capital requirements. In response, officers advised that the TMSS was agreed by Full Council every year and that  any changes in capital requirements would have to be assessed to see if they were within the existing operational and authorisation limits of the current strategy.

The Following comments were agreed by OSC to be passed on to Corporate Committee for their consideration:

• The Committee requested that information regarding the revenue implications of capital decisions be passed on to Corporate Committee and shared with OSC. (Action: Thomas Skeen).

* Clerks Note – revenue implications set out in below table*

• The Committee commented that commented that the TMSS was ‘cautious, but safe’.

• The Committee requested that the half yearly treasury performance update report also be presented to Overview and Scrutiny, this report includes information about capital delivery, and was normally presented to the corporate committee. (Action: Thomas Skeen/Clerk).

• The Committee noted that capital expenditure should be monitored closely, as investment in capital can help to keep revenue costs down.