Members considered the Draft Treasury Management Strategy 2022/23, Prudential indicators and Minimum Revenue Provision (MRP) Policy, introduced by the Section 151 (S151) Officer, and presented to the committee for scrutiny prior to being presented for approval by Full Council in March.

The Strategy incorporated the requirements of the 2017 CIPFA Prudential Code.  A new Code had been issued in December 2021 for implementation by 2023/24. However, some elements were already incorporated into the Treasury Management and Capital Investment Strategies. For the Authority, new Prudential indicators were included which reflected the Borrowing Liability Benchmark which illustrated the lowest risk level for borrowing, and Commercial income as a percentage of Net Revenue Expenditure.

The Treasury Management Strategy brought together a number of strategies and policies, these being:

·         The Borrowing Strategy, which would ensure consideration was given to affordability and sustainability for the repayment of debt.

·         The Annual Investment Strategy which was to provide security of the investment, consider liquidity and cashflow requirements, and finally yield, all of which were considered in the context of the Authority’s risk appetite.

·         The MRP policy page which determined how the Authority would repay prudential borrowing on an annual basis.

·         The Committee was also requested to consider the Capital Investment Strategy, which was the framework by which capital investment and financing decisions would be made.

Draft prudential and treasury indicatorswere calculated in November. They would therefore be updated based on the final Capital Programme and Medium-Term Financial Analysis and would be further updated for the final version laid before Council. The S151 Officer also brought attention to the Non-Treasury Investments.

There was one change of note in relation to the Minimum Revenue Provision Policy, and in accordance with expected changes in legislation:

·          A Minimum Revenue Provision charge is to be made on an annual basis to reduce the level of borrowing attributed to commercial investment properties. This is rather than the existing policy of a voluntary MRP reviewed on an annual basis.

In relation to the Authority’s investment property portfolio, recent changes to the conditions for borrowing from the Public Works Loans Board excluded borrowing for commercial purposes that had the primary objective of securing a yield.

This meant that any additional property acquisitions (subject to legal advice) would need to be funded from the Authority’s resources. However, borrowing was allowed to effectively manage the portfolio, such as for a replacement asset, should a property be sold.

The Authority would continue to ensure it acted reasonably, that Members understood the policy, and it was discussed at the recent Councillors’ training session on Treasury Management that any decisions should be prudent and that any investments should be proportionate.

In addition, whist the counterparties for investment had not been amended, the authority would consider investment opportunities which promoted Environmental, Social and Governance investing where possible.

The S151 Officer then updated the Committee on Treasury Management practices. Advising that the Treasury function was carried out in line with the Treasury Management Code of Practice and the Prudential Code.

The  ...  view the full minutes text for item 46