The Cabinet considered a report of the Chief Executive covering the treasury management activity and compliance with the treasury management strategy for both quarter three and the period from April to December 2017.

Resolved:

1. That the Quarter Three Treasury Management Report for 2017/18, be approved.

2. That it be noted that the 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 December 2017.

3. 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.

4. That it be noted that an average of £47.4m of investments were managed in-house.  These earned £0.157m of interest during this nine month period at an average rate of 0.44%.  This is 0.27% over the average 7 day LIBID and 0.14% over the average bank base rate.

5. That it be noted that an average of £5.0m was managed by an enhanced cash fund manager.  This earned £0.023m during this nine month period at an average rate of 0.62%.

6. That it be noted that an average of £15.2m was managed by two short dated bond fund managers.  This earned £0.176m during this nine month period from a combination of an increase in the value of the units and income distribution, giving a combined return of 1.54%.

7. That it be noted that an average of £16.3m was managed by two property fund managers.  This earned £1.353m during this nine month period from a combination of an increase in the value of the units and income distribution, giving a combined return of 11.01%.

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 1^st April 1998) remained at the same level of £227.8m (Housing Revenue Account (HRA): £77.0m; GF: £150.8m) during the period from April to December 2017.

9. That it be noted that the level of financing for ‘invest to save’ capital schemes increased from £7.90m to £8.80m during the period from April to December 2017.

Reasons for Decision:

The CIPFA Code of Practice on Treasury Management recommends that Local Authorities should submit reports regularly.  The Treasury Management Policy Statement for 2017/18 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 an Executive Function.

Eligible for call-in to: Policy & Resources Scrutiny Committee

Executive Councillor: Cllr Moring