The Cabinet considered a report of the Corporate Director for Corporate Services detailing the treasury management activity for both quarter two and the period from April to September 2015.

Recommended:-

1.That the Mid-Year Treasury Management Report for 2015/16, be approved.

2.That the Revised Minimum Revenue Provision Policy 2015/16, as set out at Appendix 3 of the submitted report, be approved.

3.That it be noted that treasury management activities were carried out in accordance with the CIPFA (The Chartered Institute of Public Finance and Accountancy) Code of Practice for Treasury Management in the Public Sector during the period from April to September 2015. 

4. That it be noted that the loan and investment portfolios were actively managed to minimise cost and maximise interest earned, whilst maintaining a low level of risk. 

5.That it be noted that an average of £66.0m of investments were managed in-house. These earned £0.20m of interest during this six month period at an average rate of 0.62%. This is 0.26% over the average 7 day LIBID (London Interbank Bid Rate) and 0.12% over bank base rate.  

6.That it be noted that an average of £24.9m of investments were managed by our external fund manager. These earned £0.08m of interest during this six month period at an average rate of 0.66%. This is 0.30% over the average 7 day LIBID and 0.16% over bank base rate. 

7.That it be noted that an average of £5.0m was managed by a property fund manager. This earned £0.185m during this six month period from a combination of an increase in the value of the units and income distribution, giving a combined return of 7.38%. The fund started the six month period at £4.989m and increased in value with the fund at the end of the period at £5.174m. 

8.That it be noted that the level of borrowing from the Public Works Loan Board (PWLB) (excluding debt relating to services transferred from Essex County Council on 1st April 1998) remained at the same level of £237.8m (Housing Revenue Account (HRA): £80.8m, General Fund: £157.0m) during the period from April to September 2015.

9.That it be noted that the level of financing for ‘invest to save’ schemes increased from £0.14m to £0.65m during the period from April to September 2015.

Reason for Decision

The CIPFA Code of Practice on Treasury Management recommends that Local Authorities should submit reports regularly. The Treasury Management Policy Statement for 2015/16 set out that reports would be submitted to Cabinet quarterly on the activities of the treasury management operation.  

Other Options

There are many options available for the operation of the Treasury Management function, with varying degrees of risk associated with them. The Treasury Management Policy aims to effectively control risk to within a prudent level, whilst providing optimum performance consistent with that level of risk.

Note:- This is a Council Function.

Eligible to call-in to Policy & Resources Scrutiny Committee

Executive Councillor:- Cllr Woodley