Issue - meetings

To consider the recommendations from the meeting of the Cabinet held on 3^rd May and 1^st June 2022.

The Chairman explained that recommendations had been made at meetings of Cabinet held on 3^rd May and 1^st June 2022 which had been highlighted for Members’ consideration at the meeting.

Treasury Management and Investment Strategy

The Portfolio Holder for Finance and Governance presented the Treasury Management and associated Investment, Capital and Minimum Revenue Provision Strategies.  Council was advised that these strategies detailed how the authority would deal with its debt and investments in the following financial year.  This included the Council’s prudential indicators, which local authorities had been required since 2003 to review, setting out the limits on borrowing and investing within which the Council needed to operate.

There was a statutory requirement for the Council to set these strategies on an annual basis, to report on progress on a half yearly basis and to produce a financial outturn report at the end of the year.  All of these reports needed to be considered at a meeting of Council.  Should the authority breach any of the prudential indicators, there was a requirement for Council to approve any subsequent changes.

Council was informed that the most significant change for the year ahead was that Councils could not invest for yield and the Section 151 Officer needed to certify for this.  Should the Council be found to be investing for yield, the authority would not be able to use debt financing from the Public Works Loan Board (PWLB) ever again.  This debt was significantly cheaper than commercial debt and was a cornerstone of Council investment strategy across the country.

Bromsgrove District Council had not taken out new long-term debt for some years.  However, new capital works were set out in the authority’s Capital Financing Requirement.  Even in cases where these works were financed from balances or working capital, there was a requirement for a Minimum Revenue Account (MRA) repayment.

The Capital Strategy provided further information about the Council’s plans for borrowing to fund the authority’s capital programme as well as the measures that would be taken to finance this work.  This included the Burcot Lane and Levelling Up regeneration schemes.  Information was included in respect of the Capital Financing Requirement, which was the figure on which Minimum Revenue Provision repayments were based.  In addition, Council debt levels were highlighted in the strategy.  The Council could not breech authorised limits and could only breech operational boundary limits for short periods of time.

The Treasury Management Strategy detailed the overall economic position.  Since the strategy was drafted, there had been changes to the economy due to the impact of the war in Ukraine.  Officers were anticipating that this would significantly impact on projected interest rates in the short and medium-term. 

Further information was provided about how the Council invested surplus funds.  Refinancing indicators had not been changed and were set at 100 per cent to allow for the greatest level of flexibility due to the nature of the economy.

The Minimum Revenue Position (MRP) Policy had not changed.  However, the Council would  ...  view the full minutes text for item 26