Issue - meetings

That the draft Treasury Management Mid-Year Report 2018/19 be recommended to Cabinet on 18 December 2018.

The Interim Finance Manager (Technical Accountancy) presented the draft Treasury Management mid-year report for 2018/19 prior to consideration by Cabinet.  An update on Quarter 2 was shared for information.

A summary of the key points highlighted the increase in the Bank of England base rate and forthcoming regulatory changes.  There were no changes to the long-term borrowing position, and short-term borrowing was undertaken in line with the strategy.  A different approach to the way that Money Market Funds were defined would reduce the risk on those investments.

An update on Quarter 2 set out the current position on treasury management activities, with a breakdown of investments and borrowing appended.  As part of the Council’s strategy, a Treasury Management training session for all Members had been arranged for 29 January 2019.

Councillor Peers queried the £6.4m of interest payable on borrowing shown in paragraph 5.04.  The Interim Finance Manager explained that this reflected the mid-year position and that the majority of payments reflected historic borrowing decisions.  Reviews were undertaken with the treasury management advisors taking account of market conditions at that time.  Most of the loans were maturity payments which were re-financed when due for repayment.

Councillor Peers said it was important to understand the cost to the Council.  The Chief Executive said that this was a complex subject.  He said that the degree of scrutiny on borrowing was now much more robust and transparent, and that any exit strategy for any borrowing commitments must be sensitive to market conditions.

In response to questions from Councillor Johnson, clarification was given on the types of organisations with whom the Council invested and the change to EU Market Reform which further reduced the risk of investing with Money Market Funds.  During discussion on the potential impact from Brexit, it was explained that there was no effect on current borrowing as the uncertainty was around future markets.  The handout shared with Council in October had outlined potential risks to the Council and officers were contributing to national work on sharing risk and practice.

RESOLVED:

That the draft Treasury Management Mid-Year Report 2018/19 be recommended to Cabinet on 18 December 2018.