Agenda Item

 

Audit and Governance Committee                            18 January 2023

 

Report of the Chief Finance Officer

 

Scrutiny of the Treasury Management Strategy Statement and Prudential Indicators for 2023/24 to 2027/28

 

Summary

 

1.    This report is a statutory requirement setting the strategy for treasury management and specific treasury management indicators for the financial year 2023/24.  The strategy is set against a context of projected interest rates and the Council’s capital expenditure programme and leaves investment criteria and limits largely unchanged.

 

2.    The Council has significant investments and borrowing which bring with them financial risk including the loss of invested funds and the revenue impact of changes in interest rates.  It therefore requires an overall strategy as well as practices and procedures to identify, monitor and control the risks. 

 

Background

 

3.    The Treasury Management Strategy Statement and Prudential Indicators 2023/24 to 2027/28 are attached at annex A and cover the:

·        Integrated treasury management strategy statement including the annual investment strategy and the minimum revenue provision policy statement;

·        Prudential indicators

·        Revised treasury management policy statement

·        Specified and non-specified investments schedule

·        Treasury management scheme of delegation and role of the section 151 officer

 

4.    On 20th December 2021 CIPFA published the revised Treasury Management Code and Prudential Code with changes which come into effect for and are formally adopted within the 2023/24 Treasury Management Strategy Statement (TMSS).  The Council has to have regard to these codes of practice when it prepares the Treasury Management Strategy Statement and Annual Investment Strategy, and also related reports during the financial year, which are taken to Full Council for approval. As part of the updated code the Council is required to ensure that it has appropriate risk, investment, governance and reporting processes in place.  Further details are included in the attached report. 

Consultation

 

5.    Treasury management strategy and activity is influenced by the capital investment and revenue spending decisions made by the Council. The budgets have been through a process of consultation, details of which were outlined in the budget report considered at the Executive Member for Finance and Major Projects Decision Session on the 12th January 2023.

 

Options

 

6.    It is a statutory requirement for the council to operate in accordance with the CIPFA Prudential Code.

 

Council Plan

7.    The treasury management strategy statement and prudential indicators are aimed at ensuring the council maximises its return on investments and minimises the cost of its debts whilst operating in a financial environment that safeguards the council’s funds. This will allow more resources to be freed up to invest in the council’s priorities, values and imperatives as set out in the Council Plan.

 

Implications

 

Financial

 

8.    The revenue implications of the treasury strategy are set out in the budget report considered by the Executive Member for Finance and Major Projects Decision Session on the 12th of January 2023. 

 

Legal Implications

 

9.    Treasury Management activities have to conform to the Local Government Act 2003 and statutory guidance issued under that Act, the Local Authorities (Capital; Finance and Accounting) (England) Regulations 2003 (SI 2003/3146), which specifies that the Council is required to have regard to the CIPFA Prudential Code and the CIPFA Treasury Management Code of Practice and also the Local Authorities (Capital Finance and Accounting) (England) (Amendment) Regulations 2008 (SI 2008/414), which clarifies the requirements of the Minimum Revenue Provision guidance.

 

Other Implications

 

10. There are no HR, Equalities, crime and disorder, information technology or other implications as a result of this report

 

Risk Management

 

11. The treasury management function is a high-risk area because of the volume and level of large money transactions. As a result of this the Local Government Act 2003 (as amended), supporting regulations, the CIPFA Prudential Code and the CIPFA Treasury Management in the Public Services Code of Practice (the code) are all adhered to as required. 

 

Recommendation

 

12. Audit and Governance Committee are asked to:

a.   note the treasury management strategy statement and prudential indicators for 2023/24 to 2027/28 at annex A.

Reason: So that those responsible for scrutiny and governance arrangements are properly updated and able to fulfil their responsibilities in scrutinising the strategy and policy.

 

Contact Details

Author

Chief Officer responsible for the report

Debbie Mitchell

Chief Finance Officer

 

Tony Clark

Senior Accounting Technician

 

Debbie Mitchell

Chief Finance Officer

 

 

Report approved   6th January 2023

Wards affected

All

 

Annexes

Annex A – Treasury Management Strategy Statement and Prudential Indicators for 2023/24 to 2027/28