Agenda Item No. 11(b)
THE VALE OF GLAMORGAN COUNCIL
COUNCIL MEETING: 25TH SEPTEMBER 2013
REFERENCE FROM CABINET: 29TH JULY 2013
C1428 TREASURY MANAGEMENT (L) (SCRUTINY - CORPORATE RESOURCES) –
Members were presented with the annual review report on Treasury Management 2012/13.
The annual treasury report had been prepared as required and covered:
· the economy / interest rates in 2012/13;
· the strategy for 2012/13;
· the borrowing outturn for 2012/13;
· investment outturn for 2012/13;
· compliance with treasury limits and Prudential Indicators;
The Section 151 Officer continued to adopt a cautious approach with respect to Treasury Management operations. The Council's primary objectives for the management of its investments are to give priority to the security and liquidity of its funds before seeking the best rate of return. This being the case the Authority continued to place the majority of its funds with the 'Debt Management Account Deposit Facility' (DMADF) as these deposits are guaranteed by the British Government, although the interest rate is lower than some commercial banks.
Funds not placed in the DMADF were placed with other Local Authorities. These investments attract a slightly more favourable rate of return but still give priority to the security of funds invested..
The Council's primary objective for the management of its debt was to ensure long term affordability. The majority of loans had therefore been borrowed from the Public Works Loan Board at long term fixed rates of interest. In 2012/13 the Council continued to finance its capital expenditure from internal resources rather than borrow externally. The potential reduction of the Councils investments balances at times of elevated credit risk was considered the most prudent option available to the Authority.
Council approved the Treasury Management Strategy for 2012/13 at its meeting on the 25th February 2012. The Section 151 Officer advised that all treasury management activity undertaken during the financial year complied with the approved strategy, the CIPFA Code of Practice, and the relevant legislative
The overall return on investments for 2012/13 was 0.2517%.
This was a matter for Council decision.
RESOLVED – T H A T the report on Treasury Management 2012/13 be accepted and recommended to Council for approval.
Reason for decision
To accept and refer the report to Council.