Issue - meetings

To consider a report of the Borough Treasurer.

The Leader of the Council and Cabinet Member for Policy, Finance & Devolution (Councillor Alex Ganotis) submitted a report (copies of which had been circulated) inviting the Council Meeting to consider the Treasury Management Strategy Statement, the Annual Investment Strategy and the Minimum Revenue Provision Policy 2019/20.

RESOLVED – (53 for) That approval be given to:-

·         The Minimum Revenue Provision Policy for 2019/20;

·         The Capital Expenditure forecasts and Capital Financing Requirement projections;

·         The Treasury Management Strategy 2019/20;

·         The Treasury and Prudential Indicators and limits 2019/20-2021/22;

·         The Annual Investment Strategy 2019/20.

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

This comprehensive report proposes the 2019/20 Treasury Management Strategy, Annual Investment Strategy, Minimum Revenue Provision Policy and prudent and sustainable Treasury and Prudential Indicators, which are constructed in compliance with the CIPFA Treasury Management Code of Practice.

The Council has delegated the role of ensuring effective scrutiny of its Treasury Management Strategy to the Corporate, Resource Management and Governance Scrutiny Committee (CRMG).  As such, the views of CRMG were sought and any opinions or suggestions made have been taken into account when formulating the Council's Treasury Management Strategies for 2019/20.

The first part of the report details the Council’s Capital expenditure plans and Strategy which are a key driver to the long-term borrowing aspect of treasury management activity and strategy; these are reflected in a number of prudential and treasury indicators. 

The report develops to show how capital expenditure funded by prudential borrowing is subsequently charged against the Council’s revenue resources in the Minimum Revenue Provision (MRP) Policy Statement.

Fundamentals of the Council’s investment policy, approach to creditworthiness and investment strategies for 2019/20 are included in the Annual Investment Strategy statement.

The report provides an economic commentary and interest rate forecast, detailing likely scenarios for the economy and financial markets in 2019/20 based on current information.

A key highlights report is provided which summarises the main points of the more comprehensive report.

An Equalities Impact Assessment has been carried out on the Treasury Management Strategy; this is included at Appendix Six.

Cabinet is asked to recommend that the Council Meeting approves

•      The Minimum Revenue Provision Policy for 2019/20;

•      The Capital Expenditure Forecasts and Capital Financing Requirement projections;

•      The Treasury Management Strategy 2019/20;

•      The Treasury and Prudential Indicators and Limits 2019/20-2021/22;

•      The Annual Investment Strategy (AIS) 2019/20.

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) inviting the Cabinet to consider the proposed 2019/20 Treasury Management Strategy, Annual Investment Strategy, Minimum Revenue Provision Policy and prudent and sustainable Treasury and Prudential Indicators, constructed in compliance with the CIPFA Treasury Management Code of Practice.

RESOLVED – That in relation to the 2018/19 Treasury Management Strategy, Annual Investment and Minimum Revenue Provision Policy the Council Meeting be recommended to approve:-

·           the Minimum Revenue Provision Policy for 2019/20;

·           the Capital Expenditure Forecasts and Capital Financing Requirement projections;

·           the Treasury Management Strategy 2019/20;

·           the Treasury and Prudential Indicators and Limits 2019/20-2021/22; and

·           the Annual Investment Strategy (AIS) 2019/20.

To consider a briefing note of the Borough Treasurer.

During the recent annual Member training sessions on the Treasury Management Strategy 2019/20 for CRMG and Cabinet which took place in December 2018, comments made by Link Asset Services (the Council’s external treasury management advisors) described the Council as being one of the most risk averse, which in turn may have lead Members to view this remark negatively, particularly with a view to investment returns.  This note clarifies the Council’s approach to risk and the context to which these comments were made.

The Governance Scrutiny Committee is asked to note and comment on the paper.

Officer contact: Michael Cullen, 0161 474 4631, michael.cullen@stockport.gov.uk

The Borough Treasurer submitted a report (copies of which had been circulated) providing the Scrutiny Committee with a response to issues raised during the recent annual member training sessions on the Treasury Management Strategy in December 2018 in relation to how risk averse the Council was in relation to its investment returns.  The report clarified the Council’s approach to risk and provided context for the issues that had been raised.

RESOLVED – That the report be noted.

To consider a report of the Borough Treasurer.

This report seeks the views of Scrutiny Committee on the development of the Council’s Treasury Management Strategy Statement, Annual Investment Strategy and Minimum Revenue Provision Policy for 2019/20 prior to consideration by the Council Meeting on 21 February 2019.

The Scrutiny Committee is invited to give due consideration to the questions set out at paragraphs 9.13, 10.8 and 11.5 so that their views can be taken into account in the development of the Council’s 2019/20 Treasury Management Strategy Statement.

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

The Borough Treasurer submitted a report (copies of which had been circulated) seeking the views of the Scrutiny Committee on the development of the Council’s Treasury Management Strategy Statement, Annual Investment Strategy and Minimum Revenue Provision Policy for 2019/20, to be considered for approval at the Cabinet Meeting on 5 February 2019 and the Council Meeting on 21 February 2019.

The Leader of the Council (Councillor Alexander Ganotis) attended the meeting to answer councillor’s questions.

The following comments were made/ issues raised:-

·         At recent training for members with an external adviser had led to the suggestion that the Council’s investment policy was overly risk averse and comment was sought from the Borough Treasurer. In response, the Borough Treasurer expressed surprise at the suggestion as this had not be raised with the Treasury Management Team previously. It was further commented that the Council’s policy was prudent policy with the outcomes outperforming the risk profile. The Borough Treasurer undertook to seek further feedback from advisers and report back to the Scrutiny Committee.

·         Would the Council be utilising more long term borrowing in the future? In response it was stated that it was expected the Council would undertake more long term borrowing in 2018/19 and into 2019/20 to protect against interest rate rises and to ensure the Council was not over reliant on short-term cash supply, particularly toward year end when availability was more limited.

·         Was the downward adjustment of equities likely to require adjustments to pension contributions? In response it was stated that the view of the GMPF was that the fund was robust and it was expected that there would be a reduction in employers’ contributions.

RESOLVED – That the report be noted.