Decision details

This report considers the draft Treasury Management Strategy Statement and Prudential Indicators for 2017/18, prior to its submission to the Council for approval.

Regulations require the Council to prepare and formally approve both an annual Treasury Management Strategy and Prudential Indicators.  The document for 2017/18 is attached at Appendix A for consideration by the Executive before being submitted to Council for approval.

Main highlights in the Strategy are:

Capital Issues

(a)  The level of capital expenditure estimated for 2017/18 is £30.4 million.  We currently estimate that £19.7 million of this will be met by new borrowing.

(b)  There will be an increase in the amount of Council Tax contributing to the cost of capital expenditure, due to new borrowing in 2016/17 and 2017/18.

(c)  The Minimum Revenue Provision (MRP) policy statement has been amended to reflect assets that are held for less than 5 years.  MRP will not be charged on these assets but the capital receipt generated by the sale of the asset will be used to repay the debt instead.

Treasure Management Issues

(d)   The Council’s treasury management advisers changed in 2016 to Arlingclose.  The approved counterparty list has been amended the reflect Arlingclose’s recommended layout.

(e)  Unsecured bank limits per counterparty have reduced from £6 million to £2 million and the limit on money market funds has reduced from £6 million to £4 million per fund.  This is to reflect the increasing risks and falling returns of the short-term unsecured bank investments.

(f)   Building Society limits have also changed from investments in all building societies with assets in excess of £5 billion to those only meeting the minimum credit rating criteria in the Strategy.

RESOLVED that the Executive:-

(a)  endorses the draft Treasury Management Strategy and Prudential Indicators for 2017/18, attached as Appendix A to this report; and

(b)  submits the report to Council for approval.