Issue - meetings

Treasury Management 2018/19 Strategy and Quarter 3 Update 2017/18

Meeting: 24/01/2018 - Audit Committee (Item 44)

44 Treasury Management 2018/19 Strategy and Quarter 3 Update 2017/18 pdf icon PDF 150 KB

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(a)       That the draft Treasury Management Strategy 2018/19 be recommended to Cabinet on 20/02/18.  The Committee confirms on this occasion that the issue it wishes to have brought to the Cabinet’s attention is concern about potential risks arising from late availability of CIPFA guidance on the updated Codes of Practice; and


(b)       That the Treasury Management 2017/18 quarterly update be noted.


The Finance Manager - Technical Accountancy presented the draft Treasury Management Strategy 2018/19 for review and discussion, seeking recommendation to Cabinet.  All Members had been invited to a training session in December 2017 in preparation for approving the Strategy at full Council later in the month.  Also presented for information was the Quarter 3 update on matters relating to the Council’s Treasury Management Policy, Strategy and Practices 2017/18.


The report summarised the main changes arising from a recent update to two Codes of Practice by the Chartered Institute of Public Finance and Accountancy (CIPFA).  Due to timescales and the fact that CIPFA had not yet published practical guidance to accompany the updates, the Treasury Management advisors (Arlingclose) had recommended that the Council set its 2018/19 Strategy using the 2011 version of the Code.  Key changes from the previous Strategy were highlighted, noting that Section 4 (local context) was based on work currently in the Capital Programme which may be subject to change before submission of the report to Cabinet and Council.


During an update on Treasury Management 2017/18, the Finance Manager referred to previous discussion on MiFiD II (Markets in Financial Instruments Directive) resulting in agreement for the Council to opt up to ‘professional’ client status.  Since publication of the report, the Council had been approved to this status by 11 financial institutions and was awaiting a response from another one.


Sally Ellis referred to publication of the CIPFA guidance, due in the second half of the year, and asked about the risks arising from implementing changes at a late stage.  The Finance Manager explained that the 2011 Code still applied.  Whilst some preparations could commence, the practical implications would require further discussion once the guidance was made available, for example clarity on the wider definition of ‘investments’.  The Council had a good approach to measuring risk associated with long-term investment decisions and it was important not to become overburdened with the risk framework if requirements of the Code were met.  Sally requested that an additional update on Treasury Management be scheduled in the Forward Work Programme.


The Chief Executive did not expect the changes to affect practices as they generally applied to the recording and classification of items.


In response to questions from Councillor Johnson on the CIPFA changes, the Finance Manager interpreted these to be around increased commercial ventures undertaken by councils in England mainly.  On MiFID II, she provided information on the regulated financial institutions required to give approval to the Council’s professional status and agreed to share a list of those organisations which would accompany the Treasury Management Practices and Schedules.


Councillor Woolley spoke about the need for Welsh Government to be clear on reorganisation plans for local government.  He asked whether the repayment of a £1.6m loan during Quarter 3 had been made using current funds or borrowing.  The Finance Manager said that such decisions were determined by the financial position on the day that the loan matured and would provide a separate  ...  view the full minutes text for item 44