Issue - meetings

Report FSD16050

Members considered the Treasury Management Annual Report for 2015/16 (prior to reporting to full Council on 26^th September 2016) and summarised treasury management activity for the quarter to 31^st March 2016.

Investments at 31^st March 2016 totalled £285.5m (excluding the balance of the Heritable investment) with £24.4m of temporary external borrowing.

In addition to ensuring best practice in accordance with the CIPFA Code of Practice for Treasury Management, the report also included an update on the Council’s investment with Heritable Bank.

Concerning the final quarter 2015/16, a Member felt that it was necessary to influence what is going to take place rather than report previous quarter activity. If the existing reporting structure is necessary, he felt that it would be helpful to publish reports earlier so that Members can discuss their content with officers. When seeking to invest, the Member felt that fund application was guarded with no investment grade investments taken on. Concerning the CCLA Local Authorities’ Property Fund, he thought that this could be very long term with a risk of being locked into the investment and income reduced. Noting the performance of Diversified Growth Funds (DGF), he asked whether there were any plans to review DGF performance. He also felt that a lot of historical material in the report was unnecessary.

In response to the points raised it was confirmed that economic outlook information from the Council’s external treasury advisers, Capita, had yet to be received and by waiting until September a better informed report could be provided. The CCLA Fund was restricted to Public Authority clients; there was currently a waiting list should it be necessary to redeem investments but there was not currently a surge of interest to do so. The Chairman felt that it was necessary to monitor the situation.

It was also confirmed that performance of the DGF investment would be reviewed along with DGF investments in the Pension Fund. It was however accepted from the outset that the value of DGF returns would go up as well as down and officers were waiting for Quarter 1 performance to see whether there was any further movement. 

RESOLVED that the Treasury Management Annual Report for 2015/16 be noted and the Portfolio Holder and Council be recommended to:

(1) note the Treasury Management Annual Report for 2015/16; and

(2) approve the actual prudential indicators within the report.