Issue - meetings

Capital, Investment and Treasury Management Strategies and MRP Statement

Meeting: 04/03/2024 - Council (Item 8)

8 Capital, Investment and Treasury Management Strategies and MRP Statement WBC24-001 pdf icon PDF 131 KB

Additional documents:

Minutes:

The Deputy Leader of the Council introduced the report on the Capital, Investment and Treasury Management Strategies and MRP Statement.  The Council was advised that local authorities were required by statutory guidance and under the CIPFA Prudential and Treasury Management codes to produce a series of reports as part of their annual budget approval.  The reports included a Capital Strategy setting out the overall strategy for capital expenditure and finance for the coming year, an Investment Strategy for all investments other than those held for treasury management purposes, a Treasury Management Strategy on borrowing needs, and a Minimum Revenue Provision (MRP) Policy Statement.

The reports provided a comprehensive picture of the Council’s capital, borrowing and investment position and included the prudential indicators, limits and investment indicators required under the respective codes and guidance.

The Leader of the Council summed up the proposals following a brief debate before the Council unanimously agreed to support the recommendations outlined in the paper.

RESOLVED

That (i)     the Capital, Investment and Treasury Management Strategies for 2024/25, including the prudential indicators, be approved;

          (ii)   the 2024/25 MRP policy statement set out in Appendix A to the Treasury Management Strategy be approved;

          (iii)  the 2023/24 MRP policy be amended to align it with the MRP approach for 2024/25 in order to comply with MRP guidance in the current financial year (i.e. 2023/24); and

          (iv)  the Debt Reduction Plan Principles set out in Appendix E to the Treasury Management Strategy be approved.


Meeting: 28/02/2024 - Overview and Scrutiny Committee (Item 8)

8 Capital, Investment and Treasury Management Strategies and MRP Statement OSC24-014 pdf icon PDF 61 KB

Reporting Person: Eugene Walker

Additional documents:

Minutes:

Eugene Walker summarised the intention of the reports, realigning the Council from undertaking major developments to rationalising debt.

The Council continued to carry in its budget costs from historic investments in commercial loans and its asset portfolio.

The Treasury Management report set out the Council’s approach to Minimum Revenue Position and prudential indicators.

Future capital receipts would be used to pay off debt with the exception of those in the Housing Revenue Account which would be applied to undertake works in the housing stock.

In response to a question from the Chair the Chief Finance Officer confirmed that there would be quarterly reporting on treasury management to aid monitoring of adherence to it.  It was to be determined whether the Committee or Audit Committee would be the most appropriate recipient of the report.  There would be separate reporting on asset rationalisation and debt repayment at regular intervals, the best practice approach was to be determined.

The Section 151 Officer considered that the sale of assets was preferential long-term as opposed to retaining assets and receiving their revenue to the Council in terms of handling debt.

As previously noted, all debt interest payments from Council companies had been suspended and work would be undertaken to determine levels of interest payments that were sustainable for each.

Although the Council had achieved savings of £8.5 million for the year, due to the commercial estate burden and historic investments the savings did not equate to right-sizing.

The Chief Finance Officer noted that the amount of short-term borrowing was too high for the Council but considered that the higher repayment rates for longer term loans would cost the Council more money if switched to.

When borrowing above a threshold from the Public Works Loans Board (PWLB) a premium or discount was paid dependent on the market rates which would impact total borrowing.  An approach to refinancing and repaying loans would need to be discussed with Government at an appropriate juncture.  However, the Government understood the Council’s need to service its £274 million in short-term loans.  The premium was built into the £64 million interest payment the Council owed in 2024/25.

It was commented that parts of the report contained highly technical language and Officers agreed to produce a Glossary of Terms to aid those reading it.  It was further suggested that the Council aim to develop a general Glossary of Terms.

The report had identified that training was required for both Councillors and Officers.  The Committee requested that Officers submit a paper that sets out plans for the training of Officers and Councillors.

RESOLVED

That the report be noted.