Report of the Managing Director

The Managing Director submitted a report (previously circulated) seeking approval of the revised Treasury Management Strategy and Prudential which provided a half-yearly review of the Council’s borrowing and investment activities.

It was reported that the mandatory Prudential Code, which governs Council’s borrowing, required Council approval of controls, called Prudential Indicators, which related to capital spending and borrowing. The indicators were set out in three statutory annual reports and the key objectives of those reports were set out in the submitted report, together with the key proposed revisions to the indicators which related to a reduction in the Operational Boundary and the Authorised Limit to allow for any additional cashflow requirement.

Particular reference was made to the limited debt rescheduling opportunities which had been available in the current economic climate, however Officers highlighted an opportunity which had arisen in relation to two inverse Lender Option Borrowing Options (LOBO’s) whereby early settlement of those LOBOs had resulted in savings to the Council of £26.740 million over the remaining 42 years of the loans and £12.658 million at net present value discounted rates.

Reference was also made to the Treasury management budget which was forecast to achieve an improvement of £0.590 million in 2018/19, which would be returned to balances.

Members examined the Prudential Indicators and the Treasury Management half-yearly review and were satisfied with the Council’s borrowing and investment activities and the reported prudential indicators.

RESOLVED – That the submitted report be referred to Cabinet and that it be advised that this Audit Committee approves the revised prudential indicators and limits and notes the reduction in the revised Treasury Management Budget (Financing Costs).