Agenda item

Cabinet:

1. Approved the Treasury Management Strategy Statement (TMSS) 2018/19.
2. Approved the Treasury Management and Prudential Indicators set out in Appendix 7 of the report.
3. Approved the Annual Minimum Revenue Provision (MRP) Statement for 2018/19 set out in Appendix 8 of this report.
4. Will recommend the annual TMSS and MRP statements 2018/19 to Council for approval.
5. Delegated future changes required to this Strategy to the Chief Financial Officer in consultation with the Cabinet Member for Financial Management, ICT (client) & Transformation. This will provide the additional flexibility to swiftly respond to changing financial markets. 

The report was presented to Cabinet by the Cabinet Lead Member for Financial management, Transformation and IT, Councillor Clarence Barrett.

The Council is required to formally approve the Treasury Management Strategy Statement, Prudential Indicators and the Minimum Revenue Provision Statement following the recommendation from Cabinet. A primary objective of the Treasury management Service is to ensure that the Authority’s cash flow is adequately planned. With cash available when needed. Surplus monies are invested in counterparts or instruments commensurate with the Authority’s appetite for risk and liquidity requirements as priorities before considering investment return.

The second main objective is to ensure property funding of the Authority’s capital expenditure plans.  The capital plans provide a guide to the borrowing need of the Council.

On 31^st December, 2017 the Authority held £229.5 million of borrowing and £230.3 million of investments.  Table 1 of the report is based on the proposed Capital Programme for 2018/19 which will require the Council to borrow a further £10 million in 2019/20 and a further £30 million in 2020/21.

The borrowing strategy objectives will be informed by:

·       Interest rate forecasts and the shape of the interest rate curve.

·       Spread of current debt maturities to avoid high concentrations in any year

·       Shape of the Authority’s future capital finance requirement (CFR) curve; and

·       Balance of callable long term debt and non-callable long term debt in the portfolio.

The Authority’s borrowing strategy continues to address the key issue of affordability without compromising the long term stability of the debt portfolio.

Appendix 4 of the report details the Authority’s Debt Portfolio of the Authority’s fixed term borrowing and Appendix 5 details the Authority’s Minimum Credit Rating Criteria but it should be noted that investment decisions are never based solely on credit ratings and will take into account other relevant factors such as external advice.  There is confidence in that investments would only be carried out through a very robust due diligence process.

The CIPFA Prudential Code and TM Code4 requires authorities to set treasury indicators and these are set out in Appendix 7 of the report.  No breaches are likely in 2018/19.

Cabinet:

1. Approved the Treasury Management Strategy Statement (TMSS) 2018/19.
2. Approved the Treasury Management and Prudential Indicators set out in Appendix 7 of the report.
3. Approved the Annual Minimum Revenue Provision (MRP) Statement for 2018/19 set out in Appendix 8 of this report.
4. Will recommend the annual TMSS and MRP statements 2018/19 to Council for approval.
5. Delegated future changes required to this Strategy to the Chief Financial Officer in consultation with the Cabinet Member for Financial Management, ICT (client) & Transformation. This will provide the additional flexibility to swiftly respond to changing financial markets.