Agenda item

Councillor Clarence Barrett, Cabinet Member for Financial Management, introduced the report

Cabinet was reminded that the Authority’s treasury management activity was underpinned by CIPFA’s Code of Practice on Treasury Management (“the Code”), which required authorities to produce annually, Prudential Indicators and a Treasury Management Strategy Statement on its likely financing and investment activity.  The Code also recommended that members were informed of treasury management activities at least twice a year. 

The report before Cabinet fulfilled the Authority’s legal obligation under the Local Government Act 2003 to have regard to both the CIPFA Code and the CLG Investment Guidance.

The Authority had borrowed and/or invested substantial sums of money and was therefore exposed to financial risks including the loss of invested funds and the revenue effect of changing interest rates.  The successful identification, monitoring and control of risk were therefore central to the Authority’s treasury management strategy.

Cabinet was informed that the Authority’s underlying need to borrow - as measured by the Capital Financing Requirement (CFR) - at 31/03/2014 was £238 million.  The 2013/14 capital expenditure plans and treasury strategy did not imply a need to borrow over the 3-year forecast period as capital receipts, grants and revenue contributions were used to finance the capital programme rather than prudential borrowing.  The only movement in the CFR for 2013/14 was a reduction of £1.4m as a result of the statutory MRP repayment.

Reason for the Decision

By approving the final 2013/14 prudential indicators and recommending the annual treasury management report to full Council the Authority was fulfilling its legal obligations under the Local Government Act 2003 to have regard to both the CIPFA Code and the CLG Investment Guidance.

Other Options Considered

There were no other options considered.

Cabinet:

1.            Approved the final 2013/14 prudential and treasury indicators in this report

2.            Recommended the annual treasury management report for 2013/14 to full Council.