This report sets out the Treasury Management Strategy Statement, Minimum Revenue Provision Policy and Annual Investment Strategy for recommendation to Full Council.

The Committee received a report setting out a Treasury Management Strategy for endorsement and recommendation to Council.  The Strategy required approval before the start of the new financial year in accordance with the Chartered Institute of Public Finance and Accountancy’s (CIPFA) Treasury Management in the Public Services: Code of Practice 2021 and the CIPFA Prudential Code for capital finance in local authorities (2021).  The Treasury Management Strategy Statement (TMSS) was attached to the report at Appendix 1.

The report explained that Treasury Management Strategy Statement (TMSS) set out the parameters for the Council’s planned treasury activity during 2024/25 under which the Council’s Treasury Team would manage day to day activity, and that the successful identification, monitoring and control of financial risk were central to the Strategy.  Included in the TMSS alongside the Treasury Management Strategy were Capital Prudential Indicators, a Minimum Revenue Provision (MRP) Policy Statement, a Borrowing Strategy, and an Annual Investment Strategy. 

The CIPFA 2021 Prudential and Treasury Management Code also required the Council to prepare a Capital Strategy report which set out the Council’s capital requirements arising from policy objectives, as well as the associated governance procedures and risk appetite.  The Capital Strategy included non-treasury investments and was reported separately from the TMSS (Minute 54 above refers).  The CIPFA Treasury Management Code 2021 further broke down non-treasury investment into: Investments for service purposes – taken or held primarily for the provision and purpose of delivering public services (including housing, regeneration, and local infrastructure), or in support of joint working with others to deliver such services;  Investment for commercial purposes - taken or held primarily for financial return and were not linked to treasury management activity or directly part of delivering services.

The report explained that in December 2023, the Government had launched a further consultation on proposed changes to the capital framework for Minimum Revenue Provision (MRP) and a new consultation relating to additional flexibilities to use capitalisation without the requirement to approach Government (further details are set out in Sections 7 and 8 of the report respectively). As the outcome of these consultations had not yet been announced, the MRP Policy, set out within Appendix 1 to the report, and the Council’s use of capitalisation and capital receipts had all been based on the existing guidance and legislation. Depending on the outcome of these consultations, and any proposed implementation dates of any new guidance, there might be a requirement for amended policies to be brought back to Council for approval in advance of February 2025.

Items 53-55 were considered together for recommendation to the Council meeting on 27 February 2024.

Resolved -

That Council be recommended to approve:

a)        The Treasury Management Strategy Statement for 2024/25 as set out in Appendix 1, section 2;

b)        The Capital Prudential Indicators as set out in Appendix 1 section 3;

c)        The Minimum Revenue Provision (MRP) Policy for 2024/25 as set out in Appendix 1, section 4 (noting the potential requirement for a revised MRP Policy to be brought forward once the outcome of the current MRP Consultation has been announced);

d)        The Borrowing Strategy for 2024/25 as set out in Appendix 1, section 5;

e)        The Annual Investment Strategy for 2024/25 as set out in Appendix 1, section 6;

f)         The Prudential and Treasury Management indicators as set out in Appendix 1, Annex 1.