Issue - meetings

To consider a report of the Leader of the Council and Cabinet Member for Policy, Finance and Devolution.

The Leader of the Council and Cabinet Member for Policy, Finance and Devolution (Councillor Alex Ganotis) submitted a report (copies of which had been circulated) providing a mid-year review of the Council’s Treasury Management Strategy Statement and Annual Investment Strategy for 2018/19.

RESOLVED – That

·         The report and the treasury activity in the first half of the financial year be noted; and

·         The revised interest rate forecasts for PWLB rates over the short and medium term, which would drive the Council’s long-term borrowing strategies going forward be noted.

To consider a report of the Leader of the Council.

This report provides Cabinet with a mid-year review of the Council’s Treasury Management Strategy Statement and Annual Investment Strategy for 2018/19 approved by Council on 22 February 2018 and has been prepared in accordance with the CIPFA Code of Practice for Treasury Management in the Public Services.

There are no key changes required to the Treasury Management and Capital strategies for 2018/19, which continue to be relevant and effective. Interest rate forecasts (explained in Section 8) engendered by the current economic situation (given in Section 13) of the report, will lead the Council’s investment and borrowing strategies for the remainder of the financial year.

The Cabinet is invited to recommend the Council Meeting that it:

·         note the report and the treasury activity in the first half of the financial year;

·         note the revised interest rate forecasts for PWLB rates over the short and medium-term which will drive the Council’s long-term borrowing strategies going forward.

Officer contact: Lorna Soufian, 0161 474 4026, lorna.soufian@stockport.gov.uk

The Leader of the Council and Cabinet Member for Policy, Finance & Devolution submitted a report (copies of which had been circulated) providing the Cabinet with a mid-year review of the Council’s Treasury Management Strategy and Annual Investment Strategy for 2018/19, and providing an economic update for the first six months of the year and the implications for the interest rate predictions and the outlook provided in the initial Strategy.

The Leader of the Council commended the work of the Borough Treasurer and his team for their continued stewardship of the Council’s investments and borrowings. Other Cabinet Members emphasised the importance of this work to support the Cabinet’s investments in service reform.

The Leader emphasised the continued impact of low interest rates on Council borrowing and the realisation of cash-savings through the flexibility in the Council’s borrowing Strategy. He also highlighted the challenges caused by uncertainty over Brexit.

RESOLVED – That the Council Meeting be recommended to receive the Treasury Management Strategy and Annual Investment Strategy 2018/19 Mid-Year Review Report and note:

•      the report and the treasury activity in the first half of the financial year;

•      the revised interest rate forecasts for PWLB rates over the short and medium-term which would drive the Council’s long-term borrowing strategies going forward.

To consider a report of the Borough Treasurer.

This report provides Cabinet with a mid-year review of the Council’s Treasury Management Strategy Statement and Annual Investment Strategy for 2018/19 approved by Council on 22 February 2018 and has been prepared in accordance with the CIPFA Code of Practice for Treasury Management in the Public Services.

The main report is very detailed and provides a full picture of all the variables and circumstances impacting upon the Council’s treasury management operation; consequently, a ‘key highlights’ summary report containing all of the prevalent points has also been provided. This can be found immediately before the full report for quick reference.

The Scrutiny Committee is recommended to consider and comment on the report prior to submission to the Cabinet and then the Council Meeting that will be asked to note treasury activity in the first half of the financial year and the revised interest rate forecasts for PWLB rates over the short and medium-term.

Officer contact: Lorna Soufian, 0161 474 4026, lorna.soufian@stockport.gov.uk

The Borough Treasurer submitted a report (copies of which had been circulated) providing the Scrutiny Committee with a mid-year review of the Council’s Treasury Management Strategy Statement and Annual Investment Strategy for 2018/19.

The Leader of the Council (Councillor Alexander Ganotis) attended the meeting to respond to questions from the Scrutiny Committee.

The following comments were made/ issues raised:-

·         Comment was sought on whether the Council was considering the use of Municipal Bonds to finance borrowing. In response it was stated that these would be an option for future consideration.

·         In relation to references in the report to borrowing from BAE Systems comment was sought on how the Council would manage counterparty risk and reputational risk. In response it was stated that due diligence checks were always undertaken into any organisation the Council was going to borrow from, and BAE Systems were a reputable organisation. The rates being offered were more favourable than other sources of finance.

·         Clarification was sought on how much of the Council short term borrowing would be transferred to longer term borrowing. In response it was stated that between £20-50m was likely to be subject to refinancing, depending on prevailing economic conditions in the third quarter.

RESOLVED – That the report be noted.