Issue - meetings

Treasury Management Mid-Year Review 2018/19

Meeting: 19/11/2018 - Audit, Governance and Standards Committee (Item 61)

61 Treasury Management Mid-Year Review 2018/19 pdf icon PDF 162 KB

Additional documents:

Minutes:

Mr John Owen, Finance Manager, introduced his report setting out the activities of the Treasury Management function for the first six months of the financial year 2018/19 in accordance with CIPFA’s Code of Practice on Treasury Management in Local Authorities.  Mr Owen explained that:

 

·  The key elements of the Treasury Management Strategy approved by the Council in March 2018 were to (a) utilise cash balances rather than loan debt to finance the capital programme due to low investment returns and reducing counterparty risk and (b) greater use of local authority investments which were deemed as high security lending.  The Council had complied with both of these elements in the first six months.

 

·  A full list of the Council’s investments as at 30 September 2018 was set out in Appendix A to the report.  Total investments at that time were £27.395m.

 

·  Investment income for the period was £93k against a budget of £50k.  The difference was due to a number of issues including a reduction in the budget for investment income because it was assumed that investment rates would be lower for longer.  However, the Bank of England had increased bank rate during the year which in turn increased investment rates.  There had also been larger sums of money to invest due to slippage in the capital programme.

 

·  The operational limit for external debt, shown as part of the Treasury Indicators, acted as a warning prior to reaching the authorised limit.  The operational limit did not take into account temporary cash flow borrowing during the year and was breached for a short period between 25 and 29 May 2018 when the Council borrowed funds from other local authorities to cover its cash flow liabilities.  However, it was acceptable to breach this limit for short periods.

 

RESOLVED:  That

 

1.  The position of the Treasury Management Strategy as at 30 September 2018 be noted.

 

2.  No amendments to the current procedures are necessary as a result of the review of activities in 2018/19.