Agenda item

Treasury Management and Capital Strategies

To consider the Treasury Management Strategy and Capital Strategy for 2020/21 – 2024/25 and the authorised and operational borrowing limits.


Councillor Andrew Jarvis, Finance and Resources Portfolio Holder, presented a report setting out the Council’s Treasury Management Strategy for 2020/21 to 2024/25 and the Capital Strategy for 2020/21 – 2033/34. The Strategies had been updated to reflect the 2020/21 Budget and Capital Programme which had been considered earlier in the meeting.


The strategies fulfilled five key legislative requirements relating to the setting of prudential indicators, the Council’s Minimum Revenue Provision (MRP) Policy, the Treasury Management Strategy Statement, the Investment Strategy and the Capital Strategy, details of which were provided.


The Treasury Management Strategy was based on the proposed Capital Programme for 2020/21 – 2024/25 which had been considered at Minute C/70 above.


The Capital Strategy included potential capital expenditure not currently in the proposed Programme and arising from the review of Council Assets in 2018/19, adjusted for any proposal brought as part of the 2020/21 Capital Programme.  The resulting indicators in the Capital Strategy were, therefore, higher as it included potential expenditure and borrowing which might not arise, depending on future decisions around service delivery.  For example, the 2020/21 Capital Programme included a programme of works to the shopping centre car park which would extend its life beyond the Capital Strategy timeframe.  This had resulted in £12m of spend for 2029-30 – 2033/34 being removed from the longer term Programme.  The Capital Strategy would assist in ensuring that the Council had funds available in the future to meet future opportunities which might arise.  It also considered organisational issues, including how the Capital Programme would be prioritised and considerations, including capacity to deliver.


The report had been considered by the Overview and Scrutiny Committee on 17 January 2020.  It had also been considered by Cabinet on 5 February 2020 when the strategies and authorised borrowing limits had been recommended to Council for approval.


Councillor Jarvis commended the Treasury Management Strategy which he felt to be prudent and professional whilst allowing the Council to deliver above benchmark returns, generating year-on year income that supported its revenue budget.  He hoped that publication of the Capital Strategy in such detail improved the transparency of the Council.  He moved the recommendations contained within the report and was seconded by Councillor Mark Wilson.


During discussion, it was raised that, due to the large amount of complex terms and details, briefing sessions might be provided for councillors on how the Finance Team managed risks and investments, and Councillor Jarvis welcomed the suggestion.  Attention was drawn to the decision made by Central Government to increase the Public Works Loans Board premium by 1% and the detrimental impact on prudent councils.  Councillor Jarvis acknowledged the increase in premium which made some projects less viable, some of which were to provide social rather than financial benefits, and hoped no further pressure would be placed on those prudent councils who wished to invest for the benefit of residents.


The appropriateness of investment in property was raised and it was observed that what was suitable for pension authorities was not always appropriate for district councils.


RESOLVED – That the following be approved:-


(1)        the Treasury Management and Capital Strategies at Appendices 1 to 4 of the report; and


(2)        the authorised and operational borrowing limits set out at Appendix 1, Table 6 of the report.

Supporting documents: