Decision details

Treasury Management Activity Outturn 2018-19

Decision Maker: Audit, Risk and Governance Committee

Decision status: Recommendations Approved

Is Key decision?: No


A summary of the treasury management activity undertaken in 2018/19


Mike Jensen, Director of Investment for Financial Services presented the Treasury Management Activity Outturn 2018-19.


The following points were highlighted:


·  Global and national risk factors were likely to carry through to 2019/20 and beyond, and as such it was likely that the current treasury management strategy would continue to take advantage of short term borrowing given the low interest rates in the UK. A minor change had been made this year rebalancing the portfolio to include a small amount of longer term borrowing, as a shift in overall interest rates had made the differential between long term and short term borrowing costs much smaller. This was to mitigate the potential risk of the revocation of article 50 to leave the European Union which would have caused an increase in interest rate. The long term Lender Option Borrower Option (LOBO) loan had now been repaid on very favourable terms and the Council would continue to apply the short term borrowing policy which had proven very successful for the Council.


·  For the year ahead, it was anticipated that the interest rates in the UK would be cut further and this would allow the Council to take advantage of the lower rates via the short term borrowing policy.


·  Investment in long term holdings would continue and improvements in performance was likely if the interest rate was to further reduce as expected.


·  In general there had been a slight decline in the level of indebtedness in 2018/19 due to improved balance positions. This was expected to continue, with the overall level borrowing declining slightly.


·  It was noted that in the investment table on page 388 'bank deposit 5 years +' and 'bank & local authority deposits 5 years +' on page 390 should both read 'local authority deposits 5 years +'. Unsecured bank deposits were not made in order to maintain the Council's high quality credit profile, currently classed as AA.


·  The outturn for the year showed an under spend of £27.568 million. This was made up of changes to the minimum revenue provision and a better than budgeted treasury management performance of £16.792 million.


·  In response to a question, Mike Jensen gave his views on the potential implications of the different scenarios for leaving the European Union from a treasury management perspective.


Thanks were expressed to the Treasury Management team for the funds generated for the authority.


Resolved: That the report detailing the review of treasury management activities for 2018/19 be noted.


Report author: Paul Dobson

Date of decision: 29/07/2019

Decided at meeting: 29/07/2019 - Audit, Risk and Governance Committee

Accompanying Documents: