Issue - meetings

(a)       That the Audit Committee recommend the draft Treasury Management Strategy 2013/14, Treasury Management Policy Statements 2013-2016 and Treasury Management Practices 2013-2016 to Cabinet on 19 February 2013 subject to the amendments referred to;

(b)       That the Treasury Management 2012/13 quarterly update be noted; and

(c)        That the Finance Manager - Strategy & Technical liaise with other North Wales Authorities and Town and Community Councils to explore the suggestion for a joint approach on investments and provide a note to the Committee.

The Head of Finance presented the 2013/14 draft Treasury Management Strategy for review prior to recommendation to Cabinet.  The report also provided an update on matters relating to the 2012/13 Council’s Treasury Management Policy, Strategy and practices and on the Council’s investment in Landsbanki.

The Corporate Finance Manager remarked on the transfer of the treasury management function from the Funds team to the Strategy & Technical Team which was managed by Liz Thomas and that a treasury management training session which had been arranged for all Council Members the previous day.  The Chair commented that the training had been helpful in providing Members with a better understanding of the Council’s finances but that attendance on the day had been disappointing.

The Finance Manager - Strategy & Technical introduced the appendices to the report and said that the focus of the Committee should be to consider the Treasury Management Strategy 2013/14 which contained the Council’s approach for investment and borrowing over the coming year, together with budget implications and treasury management indicators.  An error in the Credit and Counterparty Policies table shown under (TMP1) Risk Management on the TMP Schedules would be replaced by the correct version (shown under Section 5 of the Treasury Management Strategy) before the report was submitted to Cabinet and County Council.  The Finance Manager - Strategy & Technical went on to describe the changes to the Strategy, as included in the report, which had been agreed with the Council’s treasury management advisers Arlingclose Ltd.

In response to a comment by Councillor J.B. Attridge on the Policy Statement and Practices changing from annual documents to three yearly, it was explained that any significant changes during this period would be reported to Members.

Councillor R.B. Jones pointed out that in addition to the correction to the table, the bullet point following this would also need amendment to reflect the category for minimum asset size of UK building societies of £1bn.  He sought assurance on the recommendation to allow investments with a credit rating of A- albeit for a reduced maximum six month investment limit.

The Finance Manager - Strategy & Technical said that all investments carry risk and so absolute assurance could not be given.  However, the recommendation had been made in discussion with the Council’s treasury management advisors, and was considered to be a measured risk given that it would introduce more counterparties for the Council to invest with.

Mr. P. Williams asked about any additional recommendations made by the advisors.  The Finance Manager - Strategy & Technical explained that advice had been given to increase the investment period to ten years rather than the current five year limit to reduce the unrated building society limit to those with assets less than £250m rather than £1bn and to invest more in a more diverse range of financial products which would be capital in nature.  Due consideration had been given to their suggestions, however, they were not considered as right for Flintshire’s Strategy and risk appetite currently.

Following queries raised by Councillor G.H.  ...  view the full minutes text for item 51