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Agenda item

Treasury and Capital Management

To approve and recommend approval to Council, a range of statutorily required polices and strategies relating to treasury and capital management.

Subject To Call In::No - Recommendation to Council.


That it be RECOMMENDED TO COUNCIL that the following be ADOPTED:

·        The Capital Strategy 2021/22.

·        The Investment Strategy 2021/22.

·        The Minimum Revenue Provision Statement 2021/22.

·        The Treasury Management Strategy 2021/22.

·        The Flexible Use of Capital Receipts Policy 2021/22.


95.1          The report of the Head of Finance and Asset Management, circulated at Pages No. 13-45, provided a range of strategies, policies and statements which the Council was required to adopt at the start of each financial year. The Committee was asked to recommend the adoption of the documents to the Council.

95.2          The Head of Finance and Asset Management explained that the strategies, policies and statements sought to provide clarity on the plans for the financial management of the Council for the forthcoming year. They were largely technical documents but in summary; the Capital Strategy, alongside a number of indicators, detailed a high-level overview of the Council’s approach to capital expenditure, capital financing and treasury management activity and how that contributed to the provision of local public services and how associated risk was managed; the Investment Strategy came from the Ministry for Housing, Communities and Local Government (MHCLG) statutory guidance – it was not the Council’s strategy for actual investment in either commercial or service property and it did not commit the Council to any future direction or expenditure; the Minimum Revenue Provision Statement detailed how the Council repaid its debt on borrowing; the Treasury Management Strategy set the framework within which the day to day and strategic treasury activities operated – the pooled funds were doing really well with returns of over 4% so Officers were pleased the decision had been taken to make them at the start of the COVID-19 pandemic; and the Flexible Use of Capital Receipts Policy detailed that the Council had no new requirements for flexible use in 2021/22 and did not have any known additional capital receipts which could be applied.

95.3          Referring to the Investment Strategy, a Member questioned whether the introduction could include an additional bullet point headed “To help support green recovery and fight climate change”. In response, the Head of Finance and Asset Management confirmed that the headings in the document were specified so could not be amended or added to but the climate emergency was high on the Council’s Agenda anyway so, even though it was not specified, it was always part of the work going forward. Another Member referred to the Capital Strategy and the statement that “the authority expects to remain borrowed above its liability benchmark” and questioned whether Councillors should be concerned about this. In response, the Finance Manager indicated that this was a complicated issue whereby the amount actually borrowed was compared against a different strategy to show the lowest level of borrowing. Essentially, the optimum position was to have the minimum amount of borrowing but the volatile nature of the Council’s cashflow meant it needed to borrow above the minimum in order to ensure all its commitments could be met and there was no risk that it would run out of cashflow. The Member also queried why, in terms of ‘borrowing in advance of need’, the Council had chosen not to follow the government guidance. In response, the Head of Finance and Asset Management confirmed that going forward the Council would be operating in line with the guidance as it did not intend to make any more commercial property purchases; however, in the past it had not been possible to follow the guidance as the Council needed to increase its income to balance its budgets. He undertook to add a note to the covering paragraphs to make that clearer. One Member queried who the Council had a service investment loan with and he was advised that was the Roses Theatre and the loan remained outstanding at this time. The Council stayed in discussions with the Roses Theatre Board and Director about its future but, in the short term at least, the Arts Council funding received should ensure it remained viable.

95.4          Accordingly, it was

Action By:CE

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