Agenda and draft minutes

Treasury Management Panel - Friday 12 November 2021 10.30 am

Venue: Board Room - Civic Centre. View directions

No. Item


Apologies for Absence


The Chairman welcomed Panel Members to the meeting and Mrs. Phiroza Katrak (External Treasury Advisor), who was participating in the proceedings remotely, via Zoom.


An apology of absence had been received from Councillor A Lloyd (Observer).



Declarations of Interest

To receive declarations of interest from Members including the term(s) of any Grant(s) of Dispensation by the Audit Board or the Chief Officer and Director of Corporate Services.


There were no declarations of interest.



Confirmation of the minutes of the meeting held on 5 July 2021 pdf icon PDF 266 KB




1.    That Members confirm as accurate, the Unclassified Minutes of the Panel meeting held on 26 February 2021.



Treasury Management Review: PART 1 pdf icon PDF 228 KB

Additional documents:


The Principal Accountant presented the treasury half-year report for 2021/22 to the panel, hi-lighting in particular the borrowing position, investment position, treasury indicators, investment income received to the end of September and the forthcoming changes to the CIPFA code.


The Chairman asked whether any investment income received above budget would be placed into reserves and in particular into the investment volatility reserve. The Head of Finance advised that the volatility reserve level would be reviewed but only likely to be increased if the Council considered that the level of risk had significantly changed.  There was no indication that this was presently the case.


Councillor Oakley-Dow asked about what action had been taken regarding environmental, social and governance (ESG) considerations since prior meetings.  It was confirmed that there had been further discussions regarding ESG between the Council and its advisors Arlingclose and that the top 10 holdings in the funds were to be presented by Phiroza Katrak during her section of the meeting. The aim is to generate further discussion on the topic which will then be taken away to help formulate the incorporation of ESG issues in to TMP1 Risk Management as per the expected CIPFA code





In accordance with Section 100A (4) of the Local Government Act 1972 (as amended), the Panel went into closed session to consider EXEMPT agenda Item D.



Treasury Management Review: PART 2


The Principal Accountant presented the treasury management practices to the Panel and explained their purpose.  The Practices underpinned the function of the treasury management team and their day-to-day processes. The Panel acknowledged the document and had no particular questions or comments on the Practices.  The Practices will only be taken to the Panel again if there is any significant change.


She advised the Panel on the outcome of the recent internal audit of treasury management. The function achieved a reasonable assurance outcome with one recommendation. The recommendation was agreed and will be implemented by the end of November 2021. There was a short discussion about the recommendation but no concerns raised.


Phiroza Katrak, Arlingclose gave an update on the economy including the Arlingclose forecast for GDP, unemployment and CPI. She hi-lighted that the furlough scheme was extended to September which seems to have aided in keeping unemployment levels fairly consistent but that it will be interesting to see whether October unemployment figures will increase now that it has ended. October unemployment won’t be reported until December. There are currently a good number of job vacancies but not necessarily the right people for those vacancies e.g. HGV drivers are in particular demand.


There was an expectation that the Bank of England would increase the Bank Rate at its last meeting but this did not happen. Markets are indicating they expect a rate increase before the end of March. Phiroza Katrak reminded the panel that even if the Bank Rate increases that this does not always translate into better returns for example those offered by the DMADF.


Phiroza gave further information on the forthcoming changes to the CIPFA code and Prudential Code which are out for consultation. The CIPFA code confirms that Local Authorities must not borrow primarily for investment and that they must not increase their capital financing requirement (underlying need to borrow) unless related to a function of the Council.


Going forward Prudential indicators would need to be reported at least quarterly alongside budget monitoring. The Council would need to include the Liability benchmark as an indicator, which identified the lowest risk level of borrowing.


Phiroza Katrak presented the externally managed pooled fund investment position as at the end of September 2021 and the return achieved both in capital growth and income return. This was presented in both a one year and three year view.


The top ten holdings in the Council’s investments in UK Equity Income Funds, Global Equity Income Funds and Multi-Asset Funds were presented to the panel. This opened the discussion on ESG and how the Council might move forward with incorporating ESG considerations into its investment decisions. Members also widened the discussion to environmental considerations across the organisation. Councillor Oakley-Dow was keen that any ESG investment policy adopted is not oversimplified. It was clear from the discussion that fiduciary responsibility is the main priority and that constructive engagement with funds/fund managers to understand their ESG policies going forward would be important. Further work is to be  ...  view the full minutes text for item 11.