Cabinet Member for Finance
At its meeting on 4 February 2019, Cabinet considered Paper MCa/18/61 and accepted the recommendations as set out in the report:
Recommendations to both Councils
That the following be approved:
1. The Joint Capital Strategy for 2019/20, including the Prudential Indicators as set out in Appendix A.
2. The Joint Investment Strategy for 2019/20, as set out in Appendix B.
3. The Joint Treasury Management Strategy for 2019/20, including the Joint Investment Strategy, as set out in Appendix C.
4. The Joint Treasury Management Indicators as set out in Appendix D.
5. The Joint Treasury Management Policy Statement as set out in Appendix G.
6. The Joint Minimum Revenue Provision Statement as set out in Appendix H.
7. That the key factors and information relating to and affecting treasury management activities set out in Appendices E, F, and I be noted.
97a.1 Councillor Whitehead introduced the report and informed Council that the report was a joint report that covered both Mid Suffolk and Babergh Councils, it had already been presented to and debated by the Joint Audit and Standards Committee and Cabinet. The appendices taken together in the report fulfilled the requirements as set out in the CIPFA treasury management code, the CIPFA prudential code and MHCLG investment guidance. It was the later guidance from 2018 which introduced the requirement to prepare a capital strategy and investment strategy. The requirements in respect of the Treasury Management Strategy remained largely unchanged. The new Joint Capital Strategy Appendix A in the report summarised the capital expenditure and financing requirements of the full capital programme, therefore covering both general fund and the housing revenue account. The details of those were in the respective budget reports. The strategy document sets out the capital expenditure and capital investment decisions and the associated risks and rewards and it explained how risk was managed for future financial sustainability. Councillor Whitehead added that the prudential indicators played an important role in demonstrating that the investment plans that the Council had were affordable, prudent and sustainable and that decisions were made according to good practice. The capital expenditure for Mid Suffolk planned for 19/20 was shown as £43.27m most of which was funded by borrowing. Councillor Whitehead then highlighted sections 9 and 10 in the report, in which the Section 151 Officer gave her opinion that the capital programme was prudent, affordable and sustainable. The new joint investment strategy detailed in Appendix B of the report detailed those expenditure items in the capital programme that specifically related to assets bought or owned by the Council to generate a return or for regeneration or for economic and social development of the local area. The document also explained how each investment contributed to the Council’s priorities and sets out their security, liquidity and risk. Both Councils were now developing their property and commercial portfolios either by purchasing them directly or through the Councils’ investment companies. Councillor Whitehead highlighted a key paragraph in the report under 6.2, which stated that neither Council planned to borrow above its capital financing requirement and that was in accordance with the prudential code.
97a.2 Councillor Whitehead went on to commend the finance and assets and investment staff for their hard work and due diligence in producing such a comprehensive and detailed document and then MOVED the recommendations in the report which Councillor Flatman seconded.
97a.3 Councillor Field queried the bottom of page 114 relating to investment income and interest payable and the impact of Brexit and sought an explanation as to what this meant?
97a.4 In response the Section 151 Officer stated that there was something in the Brexit legislation that meant that this was a likely consequence. MHCLG were now acutely aware of the issue, and the Council’s Treasury management advisors Arlingclose had been bringing this to the minister’s attention and they were now looking to actually put something in place that would stop that happening.
It was Resolved:-
(i) That the Joint Capital Strategy for 2019/20, including the prudential indicators as set out in appendix A of the report be approved.
(ii) That the Joint Investment Strategy for 2019/20 as set out in Appendix B of the report be approved.
(iii) That the Joint Treasury Management Strategy for 2019/20, including the Joint Annual Investment Strategy as set out in Appendix C of the report be approved.