Agenda item

The Committee considered details of the Treasury Management Strategy 2019/20 which included the financing and investment activity for the forthcoming financial year.

The Council currently had £460m of borrowing and an average annual investment balance of £45m.  It was highlighted that the Chartered Institute of Public Finance and Accountancy’s (CIPFA) Code of Practice recommended that a local authority’s total debt should be lower than its highest forecast for Capital Financing Requirement (CFR) over the next three years.  The Committee was informed that the Council would comply with this recommendation next year as the highest forecast CFR during this period was £671m and the total debt for 2019/20 was expected to be £569m.

The Committee asked a number of questions about the costs of borrowing including the acquisition of the new town centre HQ at 25 Windsor Road.  The Council had approved borrowing of £100m and had spent approximately £42m so far on the acquisition and other costs.  Members were assured that the Council only took on borrowing when required to fund specific activity and careful consideration was given to the type of borrowing to provide affordability and long term stability of the debt portfolio.

The strategic acquisitions strategy was discussed and a query was raised about whether the Council was achieving the typical yield of between 5% - 9% through its investments under this programme.  The Officer confirmed that the annual yield was within this range at 5.48%.  The strategy also included provision for purchases to further regeneration objectives and it was confirmed that acquisitions were only made if they met the criteria set out in section 11 (b) of the Treasury Management Strategy.

Members were reminded that the TMS would be considered by Cabinet on the 4th February with a view to recommending it to Council meeting on 21^st February 2019.  At the conclusion of the discussion, the report was noted.

Resolved –  That details of the Treasury Management Strategy 2019/20, as set out in the report, be noted.