Agenda item

A report from the Executive Director Resources is attached.  (Key decision – reference number 5355)

Councillor Mary Maguire (Cabinet Member for Finance and Procurement) introduced the report of the Executive Director Resources setting out the Council’s proposed Treasury Management Strategy Statement (TMSS) for the period 2022/23 to 2031/32, and Annual Investment Strategy (AIS) for the year ended 31 March 2023, together with supporting information.

NOTED

1.    The Treasury Management Strategy Statement (TMSS) for 2022/23 was attached as Annex 1 to the report. Within it were also interest rate forecasts.

2.    The Council’s strategy was set out in respect of ensuring that capital investment plans were prudent, affordable and sustainable, that cash flow was properly planned, and that cash balances were appropriately invested to generate optimum returns. It linked to the Ten Year Capital Programme and the Council’s plans for the borough.

3.    The CIPFA Treasury Management Code of Practice and CIPFA Prudential Code for Capital Finance set out requirements for local authorities’ capital investment plans. It was confirmed that Enfield Council did not borrow to invest ‘primarily for financial return’.

4.    Publication of the TM Guidance Notes for Local Authorities was awaited with details of the TM prudential indicators.

5.    Enfield Council’s funding came from a variety of sources, including external borrowing, and other funding opportunities continued to be sought.

6.    The Chair noted that the TMSS helped with management of investments and borrowing, long term vision, and support for good decision making, and that there was independent scrutiny and advice from professional advisers. It was updated annually.

7.    The Executive Director Resources confirmation that there was independent assurance that the Council’s plans were compliant and prudent. She confirmed that the Council would limit itself to a borrowing cap and in practice maintain a gap below it.

Alternative Options Considered:

The CIPFA TM code require that the Council establishes arrangements for monitoring its investments and borrowing activities hence the performance and activities of the Council’s treasury operations is being reported to this Committee on a regular basis.

DECISION: The Cabinet agreed to:

1.    Review the Draft Treasury Management Strategy and consider the five areas below:

i.  Agree the Treasury Management Strategy Statement for 2022/23 and to note the Ten Year Treasury Strategy forecast;

ii.  Note the Economic context & Interest rate forecast (Appendices A and B);

iii.  Agree the Prudential Indicators set out in Appendix D;

iv.  Agree the Minimum Revenue Provision Statement (Appendix E); and

v.  Agree Counterparty List and Limits set out in Appendix F.

2.    Recommend Council to approve the Strategy.

3.    Note General Purposes Committee will review the Treasury Management Practices annually and to receive quarterly Treasury Management monitoring reports.

Reason:

1.    The Treasury Management Strategy fulfils the Council’s legal obligation under the Local Government Act 2003 to have regard to both the Treasury Management Code and the MHCLG Guidance.

2.    The Council has borrowed and invested substantial sums of money and is therefore exposed to financial risks including the loss of invested funds and the revenue effect of changing interest rates. The successful identification, monitoring and control of risk are therefore central to the Council’s Treasury Management Strategy and to mitigate these risks.

3.    For 2022/23, the TMSS is in the same format as 2021/22 whereby it maintains the 10 year capital programme horizon extension which is beyond the required minimum. This reflects the Council’s priority to ensure that revenue budgets are sustainable in the longer term. Due diligence has been carried out on the ten year capital programme projects; it should be recognised that these are provisional estimates, undertaken to inform and support the development of a robust, affordable and sustainable Treasury Strategy.

(Key decision – reference number 5355)