Issue - meetings

That the Annual Treasury Management Report 2018/19 and Treasury Management Mid-Year Report 2018/19 be approved.

The Corporate Finance Manager presented the Treasury Management Annual Report for 2018/19 which, following consideration by the Audit Committee and Cabinet, had raised no specific issues.  He drew attention to the key points of the report which confirmed that the Treasury Management function had operated within the limits detailed in the Strategy for the period.  The Mid-Year Report for 2018/19 was also presented, having been recommended by Cabinet for approval.

Councillor Richard Jones asked whether the amount of income derived from investments could be considered as a third reason for investment (set out in section 2.02) which could make a difference during times of austerity.

In response, the Chief Executive said that the wording could clarify that the aim was to generate income from surplus funds provided that the two main principles were met.

The Corporate Finance Manager and Chief Officer (Governance) referred to the Welsh Government investment guidance which gave priority to security and liquidity, followed by yield.

Following comments by Councillor Peers, the Corporate Finance Manager said that the Treasury Management Strategy detailed the range of considerations behind investments, noting that pension fund investments were separate to those of the Council.  In local government, the approach to borrowing meant that outstanding debt was necessary to pay for investments and assets over time.  The repayment of debt over the longer term was funded through the Minimum Revenue Provision which included the Council Fund and Housing Revenue Account.  As a point of accuracy, it was clarified that the two loans detailed in section 3.03 of the Annual Report were taken out on 6 December 2018.

In response to other questions, the Principal Accountant explained that the loan for NEW Homes, the Council’s wholly owned subsidiary, was taken out over a 45 year period with a small margin added to the repayment rate over and above the amount borrowed.

Councillor Mackie queried the difference between figures on borrowing activity and was advised that the table in the annual report included other items such as the short-term debt portfolio.

In moving the recommendations, Councillor Banks said that the report demonstrated the challenging period and market conditions.  He thanked the Corporate Finance Manager and his team and paid tribute to the contributions of the Treasury Management advisors and the Audit Committee during the process.

As Chair of the Audit Committee, Councillor Chris Dolphin seconded the proposal.  On being put to the vote, it was carried.

RESOLVED:

That the Annual Treasury Management Report 2018/19 and Treasury Management Mid-Year Report 2018/19 be approved.