Issue - meetings

Treasury and Investment Strategy

Meeting: 21/02/2024 - Resources and Fire & Rescue Overview and Scrutiny Committee (Item 8)

8 Treasury and Investment Strategy pdf icon PDF 886 KB

Additional documents:

Minutes:

The item was introduced by Virginia Rennie (Interim Director of Finance). She said the key message was performance levels were good, and an additional three months’ of forecast data showed the direction of travel would continue on a positive trajectory.

 

Virginia Rennie said treasury management was becoming increasingly regulated, following well-publicised financial difficulties affecting a number of local authorities. However, the details of those financial arrangements showed that authorities still retained a large amount of flexibility in their decision making. Good management and governance arrangements were therefore of great importance.

 

Members were told that at the end of Quarter 3, there was £336million in cash in the investment balance. Virginia Rennie said this had all been earmarked. Additionally, the average balance throughout Quarter 3 had been £392million, which Virginia Rennie said demonstrated the volatility of the market. There had been a significant withdrawal of cash in November following the pay award scheme and backdating of pay.

 

Regarding liquidity of assets, there had been no change to the credit worthiness of any of the assets the Council had invested. Members’ attention was drawn to one bank that was mentioned in the report, but no money was currently invested in this. Virginia Rennie said there were no plans to change where money was invested as current return rates were good, and there was a guarantee of a return on investment. The Council would monitor which other local authorities were subject to Section 114 notices, and would not make any investments into them.

 

Regarding investment yield, Virginia Rennie said the expected earning of £3.5million had actually been £13.5million. This £10million windfall had been used to fund this year’s overspends.

 

Members were told that £39million was invested in the asset net variation section. Virginia Rennie said these typically performed best when interest rates were low, and presently they were the worst performing of the Council’s investments. A review was being undertaken to see if a change of strategy was required.

 

Borrowing currently stood at £273million, following an early repayment of £49million that had been made last year. The next repayment was scheduled for 2029. It was not anticipated the Council would need to borrow any more money this year or next.

 

Responding to a question from Councillor Sinclair, Virginia Rennie said the Council’s policy was that cash balances should not go below £100million. The Treasury Management Strategy was designed to prevent this from happening, otherwise the Council may be forced into a position where it needed to borrow money temporarily and this was not something that was desirable. Officers wanted to be proactive in reporting on the levels in the cash balances.

 

Members said they were reassured by the contents of the report that the Council’s treasury was being well managed. Members noted the contents of the report.


Meeting: 08/02/2024 - County Council (Item 3)

3 Treasury Management Strategy and Investment Strategy pdf icon PDF 140 KB

Additional documents:

Minutes:

Councillor Peter Butlin, Portfolio Holder for Finance and Property introduced and moved this report, noting that both strategies were statutory documents that full Council was required to approve on an annual basis before the start of the financial year. The documents were long and technically complex but the content was fundamental to the Council’s financial control framework and set out the rules and guidance within which the Council intended to operate and monitor performance against.

 

Councillor Adrian Warwick seconded the proposals and reserved his right to speak.

 

Councillor John Holland drew attention to fees and charges for services, noting his view that increasing fees could lead to a surplus which was in effect a tax.  In terms of estate management, he noted that there were no credible proposals for the use of the Barrack Street office which continued to stand empty.

 

Councillor Adrian Warwick noted that these were important documents setting out the Council’s appetite for risk and how investment would be made. He thanked the team for their work which had contributed to work on the budget and welcomed cross-party oversight of the Warwickshire Property and Development Group and the Warwickshire Investment Fund.

 

Councillor Butlin noted that fees and charges were not necessarily aligned to the treasury strategy and offered to discuss this point with Councillor Holland outside the meeting.  He also noted that proposals for Barrack Street were being formulated and would be shared with Councillor Holland as the local member in due course.

 

Vote:

 

A vote was held. The motion was agreed unanimously

 

Decision:

 

Resolved that:

 

1.         The Treasury Management Strategy for 2024/25 (Appendix 2 to the report) be approved with effect from 1 April 2024;

 

2.         The Investment Strategy for 2024/25 (Appendix 3 to the report) be approved with effect from 1 April 2024;

 

3.         The County Council requires the Executive Director for Resources to ensure that gross borrowing does not exceed the prudential level specified (Appendix 2 to the report, Section 3.13, Table 12 “Authorised Borrowing Limit”);

 

4.         The revised lending limits for the Warwickshire Property Development Group (WPDG) (Appendix 3 to the report, Annex 7) come into immediate effect;

 

5.         The revised lending limits for the Warwickshire Investment Fund (WIF) (Appendix 3 to the report, Annex 7) come into immediate effect;

 

6.         The County Council requires the Executive Director for Resources to ensure that gross investment in non-Treasury investments does not exceed the prudential levels specified (Appendix 3 to the report, Annex 7);

 

7.         The County Council delegates authority to the Executive Director for Resources to undertake such delegated responsibilities as are set out in  Appendix 2 to the report, Annex 7, and Appendix 3 to the report, Section 2.5; and

 

8.         The County Council requires the Strategic Director for Resources to implement the Minimum Revenue Provision (MRP) Policy (Appendix 2 to the report, Section 2.11-2.26).

 


Meeting: 23/01/2024 - Cabinet (Item 4)

4 Treasury Management Strategy and Investment Strategy pdf icon PDF 138 KB

A report recommending the Treasury Management Strategy for 2024/25 and the Investment Strategy for 2024/25, along with additional requirements as outlined in the recommendations.

 

Cabinet Portfolio Holder – Councillor Peter Butlin

Additional documents:

Minutes:

Councillor Peter Butlin introduced the report which recommended the Treasury Management Strategy for 2024/25 and the Investment Strategy for 2024/25, along with additional requirements.  He noted the influence that these strategies had on Council finances, enhancing the overall contribution to the Medium-Term Financial Strategy.

 

He expanded on the important role these played by ensuring there were adequate funds for running services whilst balancing accessibility and maximising returns.  Councillor Butlin also noted the increased public scrutiny of Council’s finances which highlighted where money was invested and ensured investments were not just chosen for yield.

 

Councillor Seccombe referenced investigative journalism in this area of finance and gave assurance that a robust view had always been taken where borrowing was required, with a view to either reduce down revenue costs or increase income.

Councillor Butlin agreed that it was a balancing act to manage borrowing and sustain the services the Council wanted to deliver.  He was confident that the Treasury Team did an excellent job and he thanked them for their hard work.

 

Resolved

 

That Cabinet recommends to Council to:

 

1)    Approve the Treasury Management Strategy for 2024/25 (Appendix 2) with effect from 1 April 2024;

2)    Approve the Investment Strategy for 2024/25 (Appendix 3) with effect from 1 April 2024;

3)    Require the Executive Director for Resources to ensure that gross borrowing does not exceed the prudential level specified (Appendix 2, Section 3.13, Table 12 “Authorised Borrowing Limit”);

4)    Approve the revised lending limits for the Warwickshire Property Development Group (WPDG) (Appendix 3, Annex 7);

5)    Approve the revised lending limits for the Warwickshire Recovery Investment Fund (WRIF) (Appendix 3, Annex 7);

6)    Require the Executive Director for Resources to ensure that gross investment in non-Treasury investments does not exceed the prudential levels specified (Appendix 3, Annex 7);

7)    Delegate authority to the Executive Director for Resources to undertake such delegated responsibilities as are set out in Appendix 2, Annex 7, and Appendix 3, Section 2.5; and

Require the Strategic Director for Resources to implement the Minimum Revenue Provision (MRP) Policy (Appendix 2, Section 2.11-2.26).