To receive a report from the Executive Director of Finance, Resources and Customer Services presenting the Council’s Annual Treasury Management Report for 2016-17 in accordance with Treasury Management Practices.  It is a regulatory requirement for Council to receive this report by 30 September each year.  (Report No: 16) (Key decision reference number: 4527)

Councillor Lemonides moved and Councillor Sitkin seconded the report of the Executive Director Finance, Resources and Customer Services presenting the Council’s Annual Treasury Management Report for 2016-17 in accordance with treasury management practices.  (Report No:  16)

NOTED

1.               The Council was required by legislation to produce a review of the actual prudential and treasury indicators for 2016/17 summarising the outturn position.

2.               The points highlighted by the majority group:

·       Council has continued with its cautious approach and has kept within its borrowing and investment limits. 

·       The Council has increased its borrowing by £116m to £554.7m, but almost all the borrowing has been done through the Public Works Loans Board and the loans are spread over 50 years.

·       The Council has also taken advantage of the low level interest rates which this year were reduced from 4.21% to 3.7%.  Because of the low interest rates investment income had reduced by £25,000, although the team have achieved an average investment rate of 0.35% outperforming the benchmark rate. 

·       The Council has complied with the prudential indicators within the Treasury Management Strategy. 

3.               The concerns of the Opposition in relation to:

·       The increase in debt level which had been rising fast since the current administration took office.

·       The increase in borrowing which would have to be paid back eventually, burdening future generations with debts.

·       The investments in what they saw as risky projects, dependent on rising property values. 

·       The differences between actual and projected costs.

·       The increased use of the facility to borrow against revenue items.

·       Borrowing for entrepreneurial purposes. 

·       The repayments on loans which would potentially need to paid for, using money diverted from front line services. 

4.               The request, in response to a statement made by the majority group, that the Monitoring Officer produce a memorandum on what is and is not lawful in relation to council borrowing for entrepreneurial purposes. 

5.               In response, the view of the majority group that all the projects that the Council was involved with were legal operations, and that the borrowing had resulted in savings overall: Housing Gateway was saving £2m a year on temporary accommodation.  If the auditors were not happy with what the Council was doing then the Council would not have been able to do it. 

Following the debate the recommendation in the report was put to the vote and agreed with the following result: 

For:  29

Against:  19

Abstentions: 0

AGREED to approve the 2016/17 Treasury Outturn report.