Issue - meetings

The Chairman stated that he had asked for this to be considered by the Committee.  He stated that there had been a good discussion at the Audit & Risk Panel when it was considered, where he had asked questions regarding alternative investment options.  He also referred to the comments made by Councillor Beales at the Cabinet meeting held on 3 November 2015 regarding non-traditional investments.  The Chairman added that he would like to see the Council moving forward to look at alternative investment opportunities.

The Leader stated that he did not disagree with the comments made by the Chairman, and agreed that the Council had gone through a period of stagnation in investment rates.  He acknowledged that the Council should be looking at other investment opportunities and there were also development opportunities which would also benefit the public.  In addition, this Council had played a big role in 2 or 3 projects ie: the University Centre and KLIC. 

Councillor Mrs Collop stated that the Treasury Team had given a good report at the Audit & Risk Committee.

The Assistant Director explained that the Leader was right that the Treasury Statement had the opportunity to take non-traditional investments.  She explained that there was the opportunity to invest in property funds but investment in development opportunities in West Norfolk would have an added advantage of additional business rates.  She added that the opportunities would come through the Cabinet process.

RESOLVED:   That the report and the treasury activity be noted.

Reason For Decision

The Council must make a Mid -Year Review of its Treasury operation, as part of the CIPFA code of Practice

The Principal Accountant presented a report which explained that the Council formally adopted the Chartered Institute of Public Finance and Accountancy’s (CIPFA) Code of Practice on Treasury Management in 2011 and remained fully compliant with its requirements.   

One of the primary requirements of the Code was:

Receipt by Council of an annual strategy report (including the annual investment strategy report) for the year ahead, a mid year review report and an annual review report of the previous year.

The Mid -Year Review Report had been prepared in compliance with CIPFA’s Code of Practice, and covered the following:

• A review of the Treasury Management Strategy Statement and Annual Investment Strategy 2015/2016.
• The Council’s capital expenditure (prudential indicators).
• A review of the Council’s investment portfolio for 2015/2016.
• A review of the Council’s borrowing portfolio and debt rescheduling for 2015/2016.

·        An economic update for the first six months of 2015/2016.

Councillor Pope asked what the end date for the NWES loan was, to which it was confirmed 30 November 2018 was the ultimate end date for the loan agreement.  Councillor Pope also asked what level of interest was paid by NWES for the total amount of the loan considering they were paid in instalments.  The Assistant Director – Resources confirmed that the interest was compounded and would be paid in full at the end of the loan, and as it was a back to back agreement, any interest accrued by the Council would be paid by NWES.

Councillor Beales explained that the reason the loan had been set up in the way it had been was because NWES needed certainty over their funding.

Councillor Long asked if the loan to Roydon Parish Council had been repaid, it was confirmed it had been.

Councillor Beales asked if as a benchmark the Council’s non traditional investments were doing well.  He referred to the fact that the Council had expertise in such things as industrial and commercial properties, and asked if there were areas the Council could go further and take a greater financial risk to develop.  The Assistant Director – Resources responded that from a financial perspective if the Treasury Management Policy was amended greater risk could be taken for greater return, as higher rates of return could be achieved by investing in housing, commercial, industrial areas.  In response to a further question from Councillor Beales on whether the Council’s experience in the non traditional area of investment mitigated some of the risk involved, the Assistant Director confirmed this, subject to appropriate business cases being prepared and agreed, giving the example of the development of industrial units in Downham Market which were let on completion.

It was confirmed that the Audit Committee had considered and noted the report.

RESOLVED:That the report and the treasury activity be noted.

The Committee is invited to consider the report and make any appropriate recommendations to Cabinet.