Agenda item

Treasury Management Policy & Strategy 2021-22 (Agenda item 12)

Report of Maxine O'Mahony, Executive Director for Strategy & Governance.


The Chief Accountant presented her final report which outlined the Treasury Management Policy & Strategy for 2021-22.


The recommendations to Full Council were highlighted.


The report was a little earlier than usually reported and the reason for this was explained.


Page 69 of the agenda pack under section 1.5 provided Members with a detailed summary of the key issues and changes made to the policies and strategies. It was noted that the only changes that had been made were the numbers in the tables in respect of the Council’s draft budget.


The Chairman asked if seeing this report earlier would cause any detrimental effects to the Council.  The Chief Accountant explained that no detrimental effects would be caused in terms of the Policy itself the only potential change was that draft budget figures were being used; therefore, when the mid-year report was discussed at the Governance & Audit Committee in December next year there could be slightly larger variances compared to the final budget figures.


Additionally, the Chairman asked if there were any particular risks that the Committee should be considering bearing in mind the year that the Council had just had.  It was explained that the main risk was the lack of ability to place monies anywhere without negative interest rates but as the majority had been resolved this should not be classed as an issue going forward.


The Vice-Chairman asked a question about the process in extending or using the Council’s overdraft of £2m.  Members were informed that as part of this Policy, if approved by the Committee and the Full Council, no formal approval was needed to use it; however, it would be signed off by herself as the Chief Accountant & Deputy S151 Officer before it was implemented and she would need to be confident that it was the best value for money compared to borrowing from, for example, the Public Works Loan Board (PWLB).


Councillor James asked a question under section 1.4 of the report where it stated that an extension to the current arrangement was being negotiated and asked if this was in the context of the pandemic. The Chief Accountant explained that this had nothing to do with Covid, it was about the contractual arrangements coming to an end.  There were very few people who offered this service and, as a consequence, the Finance Team had been liaising with the Council’s Procurement Team to extend the current contract with Link Asset Services, the Council’s external Treasury |management Advisors.


Mr Plaskett, the Lay Advisor to the Committee asked the following questions:


On page 69, under section 1.5 of the report, it stated that the Council had a borrowing need for 2020-21 but he had noticed somewhere else in the report that there was no borrowing requirement for this year. The Chief Accountant explained that this one of the oddities of the reporting on the Prudential Indicators and explained that in numbers the Council did have a borrowing need against its capital but because the Council had balances in its banks of reserves it was called internal borrowing.  In other words, the Council was able to fund the short term need to pay off the capital over the next three years for its internal balances.  


Under table 1, there was a huge amount of capital expenditure under Commercialisation and Mr Plaskett asked if this was in respect of waste collections discussed at a previous meeting.  The Chief Accountant agreed that it was a big increase than normal but the main reason for that was in respect of the two large externally funded power projects - £14m Homes England grant for power at Thetford and just over £2m for power at Snetterton also grant funded. The waste vehicles and equipment had been shown under the Place directorate. On table 2, it was explained that the very last line that showed the net financing need for the year, was reducing due to the Council repaying the borrowing from internal balances.


On page 73, on table 3, Mr Plaskett did not understand the figures and asked for these to be explained. Members were informed that this table linked to back to the very first question that Mr Plaskett had asked.  This was the number that had to be calculated for the borrowing need for Capital purposes, the number at the bottom of the table was the Capital Financing Requirement and because it was a positive number, in theory, this meant that the Council did not have enough money to finance the Capital Programme; however, it did have enough due to it being paid off in Revenue over the years.   


Table 7 on page 75, there was a typing error on the finance leases under 31/03/2020, one figure too many.


The Chairman thanked Mr Plaskett for his questions and felt that these large projects for the power at Thetford and Snetterton were very exciting and were projects that the Council had been championing for a long time.  He was pleased to finally see the evidence of them both appearing in the budgets going forward.


After being duly proposed and seconded, it was   


RecommendED to Full Council that the following be approved:


1) The Treasury Management Strategy 2021-22 to 2023-24 at Appendix A;


2) The Minimum Revenue Provision (MRP) statement contained within Appendix A which sets out the Council’s policy on MRP;


3) The Prudential & Local Indicators and limits contained within Appendix A (Tables 1-11);


4) The Investment Strategy 2021-22 (Appendix B) and the detailed criteria included in Appendix B1; and


5) The Treasury Management Policy at Appendix B2.


Supporting documents: