Issue - meetings

The Chartered Institute of Public Finance and Accountancy’s Treasure Management Code requires that authorities report on the performance of the treasury management function to Full Council at least twice per year (mid-year and at year end).  The key highlights of the mid-year report were noted as follows:

·         The investment portfolio return was 0.69% outperforming its benchmark by 0.39%, the Budgeted rate of return by 0.09% despite 3 month LIBOR falling steadily over the quarter.

·         The Arlingclose 13 London Borough average was 0.48% in quarter 2 on comparable internally managed investments.

·         There was no breach of the Authority’s prudential indicators and treasure indicators.

The total budgeted interest for the full 2017/18 year was £1.350 million.  The actual interest to the end of the quarter was £0.739 million.  The rate of return was increasing as investments mature.  There were two consultations underway which could potentially impact on treasury management and which would place restrictions on the way in which Councils could borrow and spend.  The outcomes from these consultations would be reported to the Committee.

The Committee noted:

i)             The treasury management activities for the half year detailed in the report.

ii)            The regulatory update on ‘Ring Fencing’ set out in section 1.2 of the report.

iii)           The regulatory updates on published FCA rules in relation to the second Markets in Financial Instrument Directive (MIFID II) included in section 1.3 of the report and the recent consultation by CIPFA on the Prudential and Treasury Management codes.

iv)           The changes brought about by IFRS 9 Financial Instruments, the new accounting standard for investments, borrowing, receivables and payables, which will apply to local authorities from the 2018/19 financial year onwards as detailed in Appendix D.

v)            The upcoming launch of a consultation exercise by DCLG to update the statutory guidance on Minimum Revenue Provision and Local Authority Investment Activity as detailed at the end of section 1.2.