Agenda item

The Principal Accountant gave a presentation on the Treasury Strategy Reports 2023/24 – 2026/27.

The Principal Accountant reported that treasury risk management for the Authority was conducted within the framework of the Chartered Institute of Public Finance and Accountancy’s (CIPFA) Treasury Management in the Public Services:  Code of Practice 2021 and that there was a requirement was to approve a Treasury Management Strategy before the start of each financial year.

It was noted that the Treasury Management Strategy, Investment Strategy and Capital Strategy would be submitted to Council on 1^st February 2023, for approval.

CIPFA had issued a revised Prudential Code and a revised Treasury Management Code in late December 2021.  Due to the timing of the release of these Codes, CIPFA had not required these to be implemented in last year’s Strategy.  The 2023/24 Strategy would be first one based on these new codes.

A brief explanation of the Treasury Management Strategy (Appendix 1) and Capital Strategy (Appendix 2) was provided.

The Principal Accountant referred to the Public Works Loans Board (PWLB) and advised that the Council had previously raised all of its long term borrowing from this organisation.  The PWLB had introduced new lending terms from 26^th November 2020, which aimed to prevent Councils using PWLB loans if they intend to buy or had bought any investment assets primary for yield.  Councils could still borrow for service delivery, housing and regeneration purposes.  The Council would need to complete an annual return to the PWLB setting out its plans and this would need to be signed by the Section 151 Officer.

To ensure that the Council took prudent and sustainable decision on borrowing, the Capital Financial Regulations required the Authority to charge a Minimum Revenue Provision (MRP) when financing capital expenditure by Debt.  MRP was charged over the life of the asset up to a maximum of 50 years.

An explanation of the Corporate Investment Strategy (Appendix 3) was provided.  It was noted that the Investment Strategy focussed on investments made for service purposes and commercial reasons, rather than those for treasury management.  Details were also provided in relation to Commercial Investments and Service Investments.

Ruth Jaffray left the meeting at 10:49 hours.

The Portfolio Holder for Finance commented that a robust business plan was required when borrowing money and that Members had a vital role when approving loans.  He mentioned that the business case for Dragonfly Development Limited would be submitted to Council on 1^st February 2023 for consideration.

The Portfolio Holder for Finance thanked the Principal Accountant for the presentation.

Moved by Councillor Chris Kane and seconded by Councillor Andrew Joesbury

RESOLVED that the report be noted.