Issue - meetings

(Cabinet member responsible: Mr D Dodds)

Cabinet, at its meeting on 17 October 2013, will consider a report on the outturn performance of the treasury management function for the financial year 2012/13.

The report of the Head of Finance, which Cabinet will consider on 17 October, was circulated to all councillors with the Cabinet agenda. Please bring this report to the meeting.

The recommendations of Cabinet will be circulated to councillors on Friday 18 October.

Council considered the Cabinet’s recommendation, made at its meeting on 17 October 2013, on the outturn performance of the treasury management function for the financial year 2012/13 and the approval of the actual 2012/13 prudential indicators in accordance with the requirements of the CIPFA Treasury Management Code of Practice and Treasury Management Practice 6.

Councillors extended their gratitude to Nikki Thomas and wished her well in her new job.

RESOLVED: to

1.      approve the treasury management outturn report for 2012/13;

2.      approve the actual 2011/12 prudential indicators within the report of the head of finance to Cabinet on 17 October 2013.

Purpose: to report on performance of the treasury management function (the management of the council’s investments) for the financial year 2012/13. 

Cabinet considered the report of the Head of Finance, which the Audit and Corporate Governance had previously reviewed to ensure that treasury activities were carried out in accordance with the treasury management strategy and policy.

The committee had made no recommendations on its consideration of the report.  Cabinet was therefore asked to make recommendations to Council.

Noting that the overall investment performance was above the industry average and that the council had done as well as could be expected in terms of its claim against the failed Icelandic bank Cabinet agreed to recommend the report to Council.

RESOLVED: to recommend Council to:

(a)   approve the treasury management outturn report for 2012/13;

(b)   approve the actual 2012/13 prudential indicators within the report.

Purpose: to fulfil the legislative requirements to ensure the adequate monitoring and reporting of the treasury management activities. It reports the performance of the treasury management function (the management of the council’s investments) for the financial year 2012/13.  This complies with the requirements of the Chartered Institute of Public Finance and Accountancy (CIPFA’s) Code of Practice on Treasury Management (revised) 2009

The committee considered the report of the Head of Finance that asked the committee to scrutinise the report to ensure that treasury activities were carried out in accordance with the treasury management strategy and policy.

Mr S Hewings, Accountancy Manager (Revenue), advised that whilst investment performance was above the industry average for 2012/13, income was anticipated to reduce from 2013 until such time that the market rates rose. 

Mr Hewings and Mr W Jacobs, Head of Finance, responded to comments and questions as follows:

·       Losses arising from investments in Icelandic banks were written off in the year they were incurred and gains were now added back to the accounts.

·       £5,000,000 had been invested in a local authority property fund and further investments would be considered if opportunities arose.

·       The principal amount of £12,280,000 shown on investment with Santander was a snapshot on one day and not representative of the amount invested over the year and officers were satisfied that Santander UK was a suitable counterparty having taken advice about 12 months previously.

·       Several years ago the council chose to make up part of the pension fund shortfall by way of a lump sum investment.  This was done because it was felt that, over time, returns generated by the fund would out-perform the council’s own investments returns.  It is not possible to withdraw these investments.

The committee agreed that it was satisfied that the treasury activities were carried out in accordance with the treasury management strategy and policy and made no comments and recommendations to Cabinet.