This report provides an update on the activity of the Treasury Management function for 2018/19 as at 30 September 2018.

Jean Stevenson, Chief Accountant, submitted a report providing an update on the activity of the Treasury Management function for 2018/19 as at 30 September 2018.  The report had appended a commentary on the economic backdrop for 2018/19 and a list of approved counterparties showing the limits of exposure to financial risk that might exist in terms of cash and time period.

The report stated that the Council was required to receive a report on its Treasury Management activity at least twice a year, in accordance with CIPFA’s Code of Practice on Treasury Management, which should include:

• a review of the Council’s financial investment portfolio for 2018/19 as at 30 September 2018;
• a review of the Council’s borrowing strategy for 2018/19;
• a review of compliance with the Council’s Treasury and Prudential Limits for the first six months of 2018/19; and
• an economic update for the first part of the financial year.

The report confirmed that the Council had complied with all elements of its Treasury Management Strategy Statement (TMSS), as agreed by Council on 28 February 2018 (Minute 34 refers).

The report stated that the Minimum Revenue Provision (MRP) Statement for 2018/19 had been approved as part of the Council Tax and Budget Setting on 28 February 2018 (Minute 34 refers) and would be reviewed by Council on 26 February 2019, as part of its Treasury Management Strategy alongside consideration of the Medium Term Financial Strategy 2019/20 – 2021/22.  The Council would be asked to approve two changes to the MRP Strategy, which were described in Section 5 of the report and would involve: not charging MRP to the Housing Revenue Account on the basis that it had not been a mandatory requirement for a number of years and would allow greater freedom to spread the profile of HRA provision for debt repayment to later years; and to provide for an MRP charge on borrowing to fund investment property acquisitions, thereby allowing for repayment of debt in a similar manner to other capital expenditure funded by borrowing.

Resolved:

(1)           That the performance of the Treasury Management function for the six months to 30^th September 2018 and the key issues emerging be noted;

(2)           That the recommendations to be put to Council in the Treasury Management Strategy on 26 February 2019 to update the Minimum Revenue Provision policy and Commercial Investment policy set out in section 5 and summarised above be endorsed.