Agenda item

Introduction to include a 10 minute refresher

The Finance Manager submitted a report which appended a draft report to Cabinet that would be submitted on 15^th December 2010.  The report reviewed the activities taken, investments made and borrowing.    When investments were made the Council had to demonstrate the application of its policies and criteria were made consistently.  During the first six months of the year 40 new fixed term deposits were made which made up 82% of the Council’s investment portfolio.   The remainder was held on deposit accounts.

The Council would begin to use Money Market funds to invest as well as deposit accounts as they would ensure liquidity and provide instant access.  As a result of the reduction in balances held in the deposit accounts there will be increased capacity with investment counterparties.

In response to a question from Councillor Woods, the Finance Manager confirmed that the £5,000 special investment was to the District Councils Network.  They had been approached by the District Councils Network to make an investment to promote the interest of district councils which was a once off payment and they would not be reinvesting.  The deposit accounts kept good rates and used to measure for performance and what rates could be achieved over and above the average.  It was compared to the standard rate which banks were willing to lend to each other.  Benchmarking against other Local Authorities were carried out although every Authority was unique and larger amounts achieved higher rates.  There was not a direct comparator which they could use.

The Finance Manager confirmed that no new borrowing was made in this financial year and no loans had been repaid since April 2010 other than the £16,000 of the HCA annuity payment made in September.  Maturity profile borrowing showed two loans which totalled £15.6m were due for repayment in 2014-15 and advisors had confirmed that to repay early would incur high premiums and therefore would not be beneficial.

In response to further questioning, the Finance Manager confirmed that all of the figures in the annexes would be aligned to the right to make the figures clearer.

A variation had been made to the investment strategy so investments could be made for up to two years and the Cabinet report would be amended to reflect this.  The Finance Manager confirmed that Cabinet was aware of this in the Treasury Outturn report for last year.   There had been a breach of treasury indicators which were set due to the market conditions as all of the investments had become variable.  This had been reported to Cabinet and the indicator had been changed to £10million as set out in the report.

RESOLVED: 

(1)   That the report be noted.

(2)   That the Cabinet date of 15^th December 2010 and Council date of 17^th January 2011 be included in the report.