Agenda item

The Local Government Act 2003 requires the Council to set out its Treasury Strategy for borrowing and to prepare an Annual Investment Strategy, which sets out the policies for managing investments and for giving priority to the security and liquidity of those investments. The Council nominates Audit Committee to be responsible for ensuring effective scrutiny of the Treasury Management Strategy and Policy. This report sets out the Treasury Management Strategy, Treasury Management Policy Statement, the Annual Investment Strategy for the Financial Year 2021-22, Prudential Indicators 2021-22 to 2023-24 and the Minimum Revenue Provision Policy 2021-22. 

Mr C Hand, Executive Director of Finance and Section 151 Officer, introduced the above report which set out the Treasury Management Strategy, Treasury Management Policy Statement, the Annual Investment Strategy for the Financial Year 2021-22, Prudential Indicators 2021-22 to 2023-24 and the Minimum Revenue Provision Policy 2021-22.  These would be put before full Council for approval in February. 

Mr A Stewart, Finance Manager, highlighted the key issues as follows: 

• The document contained the borrowing and investment strategy for the year ahead as influenced by the economic outlook and prospect for interest rates, contained within section 3 on page 6 of the report with further detail in Appendix 1. 

• Details of the Borrowing Strategy were set out in section 4 on pages 11 and 12 of the report. 
• It was proposed to continue with the ongoing strategy to utilise investments in lieu of external borrowing and it was intended to utilise £165.1 million of investment balances in the short term for these purposes. 
• There was still a borrowing requirement for 2021/22 of £185 million to fund the capital programme. 
• Given the market conditions, it was anticipated that borrowing requirements would be fulfilled mostly by borrowing short term but attractive interest rates would also be sought in the medium to longer term where possible. 
• Section 5 on pages 13-17 of the report covered the Investment Strategy. Paragraph 5.2 highlighted that the bank rate of 0.1% was unlikely to change for some time and this was reflected in the Councl’s budget figures that investment returns would remain low for the foreseeable future. 

• The proposal was to continue using investment balances with £165.1 million of external borrowing, however, it was anticipated some investments would be needed in the coming year. 
• The Council’s policy in terms of investments was to ensure that funds were protected and ensure sufficient liquid funds were available to meet commitments before maximising returns. 
• Investments were in line with the counterparty policy as attached at Appendix 2 for which there were no proposed changes. 
• Appendix 3 provided details of Treasury Management practices to deliver the treasury management function to minimise risk, protect capital and show there were sufficient liquid funds to meet those commitments.  There were no proposed changes to these practices. 
• The Council’s proposed prudential indicators for 2021-24 were contained in Appendix 4.  These indicators were designed to ensure the Council’s capital plans were prudent, affordable and sustainable and would be submitted to Council along with the budget report for approval. 

• The MRP Policy (policy for the repayment of debt) was set out in Appendix 5, this remained unchanged and would be submitted to Council in February for approval. 

The Chair read through the recommendations as set out on page 1 of the report and on a show of hands these were unanimously agreed. 

RESOLVED that  

1. Audit Committee recommend that County Council approve the Treasury Management Strategy Statement which includes the Treasury Management Policy Statement, the Annual Investment Strategy and Borrowing Strategy for the Financial Year 2021-22. 

2. Audit Committee recommend that County Council approve the Prudential Indicators (Appendix 4) for three years 2021-22 to 2023-24 to ensure that the Council’s capital investment plans are affordable, prudent and sustainable. 

3. Audit Committee recommend that County Council approve the Minimum Revenue Provision Policy (Appendix 5) 2021-22.