Issue - meetings

Report of the Cabinet Member Finance

The Cabinet Member Finance introduced the report and reminded Members that the council operated a balanced budget. The treasury management operation ensured that cash flow was adequately planned with surplus monies invested in low risk counterparties. Another important function was the funding of the capital plans assessing and ensuring that the borrowing needs could be met in order to fund the capital programme.

She reported that In 2017 the economy had slowed down compared with 2016 with growth being particularly weak through the period this report covered. Interest rates have remained very low and were to remain low for the foreseeable future. She reported that investment returns achieved to date of 0.60% was still a good return when compared with the benchmark 3 month London interbank bid rate, for the first six months this was averaging 0.18%, however with inflation running at 3% the council was facing increases in the costs of services but with lower investment rates. She then highlighted that this year an additional £22k had been added for investment interest to the 17/18 budget against what was reported in the last budget monitoring report.

The Cabinet Member informed Members that with returns being so much lower than inflation in August this year £1 million was invested in the CCLA property fund, which in its first quarter gave a return of 4.6%, with future returns likely to be of a similar order. She reported that a further £ 2 million was invested into this pooled fund at the end of November.

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The Cabinet Member Finance then informed that following a joint procurement with the County Council, South Gloucestershire and the Forest of Dean, a contract was awarded to Arlingclose Limited to provide treasury advice to the council for a five year period with a small saving in fees. She wished to put on record her thanks to Capita for their advice and guidance over the last five years. She reported that Arlingclose had a lot of experience in advising local authorities with pooled funds which could be very relevant to the council moving forward with security, liquidity and returns. She said that treasury had been changing immensely over the last few years with movement away from holding deposits in high street banks and diversifying its treasury management into new areas. She looked forward to reporting back higher returns in the future.

1.1         Finally, the Cabinet Member wished to put on record her thanks to officers and advisors and informed that the outturn position for 2017/18 was anticipated to be above the budget, at £45,500.

In response to a question as to whether the funds domiciled in Luxembourg were not invested there for tax reasons but for returns the Cabinet Member Finance reassured the Member that this was the case.

RESOLVED (unanimously)

That the contents of the summary report of the treasury management activity during the first six months of 2017/18 be noted.

Report of the Cabinet Member Finance

RESOLVED THAT Council be recommended to

note the contents of the summary report of the treasury management activity during the first six months of 2017/18.

The Cabinet Member Finance introduced the report and reminded Members that the council operated a balanced budget. The treasury management operation ensured that cash flow was adequately planned with surplus monies invested in low risk counterparties. Another important function was the funding of the capital plans assessing and ensuring that the borrowing needs could be met in order to fund the capital programme.

She wished to put on record her thanks to officers and advisors and informed that the outturn position for 2017/18 was anticipated to be above the budget, at £45,500

She then informed Members that the Treasury Management Panel had considered the report on 20 November and endorsed it for onward recommendation to Cabinet and Council.

RESOLVED THAT Cabinet be recommended to

note the contents of the summary report of the treasury management activity during the first six months of 2017/18.