Issue - meetings

The Council is required to approve the annual Treasury Management Framework for the following financial year. The framework must comply with the Code of Practice on Treasury Management (the Code) produced by CIPFA, however, the 2018/19 code has not yet been finalised and is awaiting policy changes from Government. Following a review by officers, it is recommended that Council extends the validity of the 2017/18 framework until an updated framework is presented to April 2018 Council.

Recommendation

It is recommended that the Executive recommends to the Council that the approved Treasury Management Framework for 2017/18 be extended until the Council meeting in April 2018.

93.1    The Treasury Management Framework for 2017/18 was approved at February 2017 Council. Treasury management is the management of the Council’s investments and cash flows, its banking, money market and capital market transactions, the effective control of the risks associated with those activities and the pursuit of optimum performance consistent with those risks.

93.2    For Waverley Borough Council this means collecting around £130m per annum and managing a similar amount of revenue expenditure together with an average investment of around £65m each day invested in financial markets and, with the introduction of HRA Self-financing in 2012/13, it now also includes borrowing of £192m and in future this could also include borrowing to support commercial investment.

93.3    The current version of the code (last updated in November 2011) incorporates the implications of HRA Self-Financing and requirements for the management of risk. The 2018 revised code is expected to require inclusion of information regarding the Council’s high level policies for borrowing and commercial investments held for financial return.

93.4    The CIPFA code requires local authorities to maintain their Treasury Management Policy in accordance with the code, and any of its revisions, and with legislation. It also requires local authorities to determine their Treasury Management strategies, Investment strategies and their Prudential Indicators on an annual basis. 

93.5    During 2017 CIPFA undertook to revise the code through a series of consultations and have delayed the publication of the revised code pending the outcome of the Government’s consultation which ended in December 2017 on proposed changes to the prudential framework of capital finance, which includes the Local Authorities Investment Code and MRP Guidance. Publication of the revised code is expected imminently but not in time for the Council to incorporate into its Treasury Management Framework at the February Council meeting.

93.6    The Council’s Medium Term Financial Plan includes significant planned investment in commercial property through the recently set up Investment Board which is developing the Property Investment Strategy in conjunction with the Value for Money Overview and Scrutiny Committee. The Council also has ambitions to maximise development of affordable housing within its Housing Business Plan. Professional treasury management advice is currently being obtained to enable the Council to develop a long term strategic financing plan to maximise and optimise financial resources on both General Fund and HRA accounts, including potential debt restructuring, use of cash reserves and borrowing whilst remaining legal and managing risk exposure.

93.7    The Council is requested to extend the adoption of the 2017/18 Treasury Management Framework until the April Council meeting where it will be requested to adopt a revised framework incorporating the revised CIPFA code, and supported by specialist treasury management advice alongside the Property Investment strategy.  The Executive accordingly

            RECOMMENDS that

28.       the approved Treasury Management Framework for 2017/18 be extended until the Council meeting in April 2018.

[Reason: to agree an extension of the current treasury management framework awaiting policy changes from Government]