Issue - meetings

Treasury Management Annual Report 2014/15 and 2015/16 Quarter 1 Update

Meeting: 15/07/2015 - Audit Committee (Item 23)

23 Treasury Management Annual Report 2014/15 and 2015/16 Quarter 1 Update pdf icon PDF 63 KB

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That the report be noted.


The Finance Manager - Technical Accountancy presented the Annual Report on the Council’s Treasury Management Policy, Strategy and Practices 2014/15 together with an update on Treasury Management activity in 2015/16 to the end of June 2015.


An update on investments in Quarter 1 showed the position at 30 June along with comparative information for the previous quarter.  Explanation was also given on the dip in yield due to the impact of banking reforms (‘bail-in’) as highlighted at previous meetings.  During the borrowing update, reference was made to the implications of the exit from the Housing Revenue Account (HRA) subsidy system and the new arrangement which would generate revenue savings for investment in existing stock and extra housing.


In response to comments from Councillor Glyn Banks, the Finance Manager provided explanation on the terms of ending the subsidy system which meant that the Council was required to draw down loans to deliver a minimum interest payment of £3.3m for each of the first five years following settlement.  At the end of the five years, dependent on wider market conditions, the Council could consider re-financing or repaying the loans.  In response to a query on investments, the Finance Manager spoke about the expectation for interest rates to rise and the exploration of new products that offered ‘floating’ rates moving with interest rates.  When asked about details on the rescheduling of outstanding loans, she explained that this would form part of budget-setting work over the Summer period and would be included within the next Treasury Management update to the Committee.


On the investment portfolio, Councillor Haydn Bateman questioned the lower interest rate for the Oversea-Chinese Banking Corporation.  The Finance Manager said that those recent investments had been made possibly due to the lower number of counterparties on the list and the agreed approach to spreading investments amongst as many counterparties as possible to reduce the impact of default.


Councillor Ian Roberts asked if the Council had received notification from NatWest Bank prior to the announcement of the branch closure in Buckley and whether any alternative arrangements had been made with schools and other users in that area.  He added that users such as schools should not be disadvantaged by having to undertake additional journeys to pay in lunch monies and that there should not be no such additional costs to the Council on alternative arrangements.  The Finance Manager confirmed that the Council had been informed and that NatWest was working with the Council to identify which establishments were using the  branches closing in September.  Work was underway to write to all regular users to ascertain details of transactional arrangements so that other viable options could be put in place prior to the closures, eg  use of Post Offices or cash collection contracts.




That the report be noted.