Chair of Joint Audit and Standards Committee
At its meeting on 12 November 2018, the Joint Audit and Standards Committee considered Paper JAC/18/8, the Half Year Report on Treasury Management for 2018/19.
A revised Page 19 to Paper JAC/18/8 was circulated at the meeting, showing a corrected breakdown for the Mid Suffolk Treasury Investment Portfolio (Paragraph 1.5 of Appendix C). Paper JAC/18/8 provided a comprehensive assessment of Treasury Management activities for the first six months of 2018/19 and Members were asked to make recommendations to both Councils to note the Mid Year position, as required by the CIPFA Code of Practice on Treasury Management.
It was RECOMMENDED TO BOTH COUNCILS:
That the Treasury Management activity for the first six months of 2018/19 as set out in Paper JAC/18/8 and Appendices (Appendix C as amended by replacement page 19 circulated at the meeting) be noted.
It was RECOMMENDED TO MID SUFFOLK COUNCIL:
That it be noted that Mid Suffolk District Council Treasury Management activity for the first six months of 2018/19 was in accordance with the approved Treasury Management Strategy, and that the Council has complied with all the Treasury Management Indicators for this period.
Minutes:
83.1 The Section 151 Officer introduced the report and highlighted that a revised breakdown for the Mid Suffolk Treasury Investment Portfolio (paragraph 1.5 of Appendix C) had been tabled.
83.2 The report itself explained in detail the factors affecting the Strategy and activities including the regulatory framework, economic conditions, interest rates and liquidity risk.
83.3 Councillor Norris informed Council that he had requested that the table on page 39 of the report illustrating the valuation of the Council’s investments provided a prior evaluation on the same date to give a better understanding of the long- term trend and sought confirmation that this would be included in future reports.
83.4 The Section 151 Officer confirmed that this would be available in the next report.
83.5 Councillor Matthissen asked if all members could have an itemised list of the Public Works Boards loans showing which projects they were loaned for and the interest rates and repayment dates including CIFCO and Gateway 14.
83.6 In response the Section 151 Officer agreed that a list could be provided, however, the list would not be directly linked to particular projects because of when the actual loan was taken out, this was divorced from the Capital Programme, loans were not taken out at the time the expenditure was incurred as treasury management was measured on a day to day basis.
83.7 Councillor Matthissen asked how this was reconciled with the Companies’ House information where it showed various loans secured against various properties?
83.8 In response the Section 151 Officer stated that the Council had to put a debenture on the properties to secure the loans, however, the Council’s financing activities were separate, so as a purchase was made for CIFCO, the Council would not necessarily take out a loan on that same day because cash flows were managed as a totality across all of its activities, including the General Fund, companies and HRA fund.
83.9 Councillor Field asked a question relating to long term borrowing being at 2.99% on page 33 of the report and the projected UBS investment yield and if there were any concerns around this, he also sought clarification on why the maturity structure was so different between the two Councils?
83.10 In response the Section 151 Officer stated that in terms of the long-term borrowing detailed on page 33 of the report, the 2.99% was the average overall of the PWLB loans. In terms of the return on the UBS investment, the 3.91% would need to be clarified, but the Council was getting interest back at a higher rate than the long- term debt was costing. With respect to the maturity structure of the two Councils there were two different officer groups at the times the loans were taken out, hence why there were different decisions made in terms of the repayment for these loans.
83.11 Councillor Stringer queried why there was no mention of the significant risk register in the report?
83.12 In response the Section 151 Officer stated that as part of the budget setting process when the report came forward in February to Cabinet and Council, she would be bringing a risk report and risk analysis about the budget itself in her capacity as Section 151 Officer.
On the proposal of Councillor Brewster and seconded by Councillor Whitehead.
It was Resolved: -
(i) That the Treasury Management activity for the first six months of 2018/19 as set out in report JAC/18/8 be noted.
(ii) That it be noted that Mid Suffolk District Council Treasury Management activity for the first six months of 2018/19 was in accordance with the approved Treasury Management Strategy and that the Council has complied with all the Treasury Management indicators for this period.
Supporting documents: