Agenda and draft minutes

Treasury Management Panel - Friday 10 February 2023 9.30 am

Venue: Board Room - Civic Centre. View directions

No. Item


Apologies for Absence


In the absence of Councillors Burrell, Holt, Oakley-Dow and Stealey, the Chairman declared the meeting inquorate.


Proceedings then continued as an informal briefing session from attending Officers and the Council’s External Treasury Advisor Mrs. Phiroza Katrak (Arlingclose Ltd.), with a Note taken for the record.


Apologies had also been received from Mrs Sarah Martin, Chief Officer & Director of Corporate Services.



Declarations of Interest

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


Not applicable.


Confirmation of the minutes of the meeting held on 11 November 2022 pdf icon PDF 95 KB


The Minutes of the Treasury Management Panel held on 11 November 2022 were noted, pending formal confirmation at the next quorate meeting of the Panel.



Treasury Management Review 2022 pdf icon PDF 119 KB

Additional documents:


Principal Accountant Catherine Bailey presented the Treasury Management strategy statement for 2023-24 to the panel. The strategy sets out the investment and borrowing limits and indicators for the forthcoming financial year. The Council’s strategy is consistent with the 2022-23 strategy other than a small changes to borrowing authorised limits and the introduction of environmental, social and governance (ESG) factors into the strategy.


Catherine provided an explanation of the liability benchmark graph and its meaning. There were some discussions around this which identified a need for this graph to be updated in the final version of the strategy to incorporate some possible longer-term changes to the Council’s financial position as a result of business rates reset. Catherine to action.


Councillor Hammock asked some questions on the strategy, clarifying whether the Finance portfolio holder would be consulted if there was to be new borrowing or re-scheduling of existing borrowing, It was confirmed that whilst delegations exist to enable Officers to do so, it is very likely that discussions would be had with the portfolio holder prior to any action. There is certainly no current plan for either borrowing of rescheduling at this time.


Councillor Hammock asked about reserves available to cover investment losses should they arise, and whether some of these are housing revenue account (HRA) reserves. It was confirmed that the majority of the reserves and investments are general fund.


Councillor Grehan asked why ESG funds have not yet been invested in. It was explained that security, liquidity and yield are the Council’s priority when considering new investments and ESG funds must also be scrutinised using these principles. Many funds (including those already invested in) will incorporate ESG, but this is not the same as the fund having specific ESG objectives.  ESG funds are relatively new, their risk-return characteristics and appropriateness in meeting the Council’s investment objectives will continue to be considered alongside other investments.


Catherine Bailey presented the investment strategy to the panel. The strategy sets out the plans for service investments and commercial investments for 2023-24. The strategy includes a new prudential indicator – net income from commercial and service investments to net revenue stream. The rest of the strategy is consistent with the 2022-23 strategy – there are no current plans for new commercial investments.


Councillor Lloyd asked whether the recent purchase of the Nucleus building was a commercial investment but it was confirmed that it was not. The reason for the purchase was not solely to earn rental income, there were clear service objectives being met by the purchase.


Catherine also gave an update on the in-house investment position as at 31st January and the yields now being achieved on those investments.





No members of the press or public were present.


Financial Markets & Investments Update from Arlingclose Ltd.


Phiroza Katrak from Arlingclose Ltd gave an update on the economy and outlook, including a review of the Bank Rate forecast and employment forecasts.


Phiroza provided a reminder of the regulation updates that have happened recently and the forthcoming changes; accounting for leases under IFRS16 due to be adopted by 2024/25, minimum revenue provision (MRP) changes due in 2024/25 and the statutory override for accounting for pooled fund investments which has been extended for a period of two years, now ending 31st March 2025.


The performance of the externally managed pooled funds was discussed and Phiroza presented a slide on the capital and income returns over both the one year and three year periods. Income is up over the 12-month period to 31/01/2023, however capital values had fallen, reflecting a very difficult market drop in which bond yields rose, (i.e. bond values fell) and equities also fell.  The three-year annualised income return on long-dated strategic funds is 3.30% across a period when interest rates were very low.


Phiroza provided some information on secured deposits that are now available to local authority investors. Previously there was significant paperwork as well as scale involved in making secured deposits and holding the collateral. There is now a broking company with the necessary regulatory permissions and the technology in place to arrange secured deposit transactions, which provides a way for investors with smaller amounts (currently £5million) to invest in secured deposits via the repo market. The Council will consider this as an investment option.