Agenda Item No. 12(a)










Cabinet was presented with the annual review report on Treasury Management 2015/16.


In March 2012 the Council adopted the 2011 edition of the Chartered Institute of Public Finance and Accountancy (CIPFA) Treasury Management in the Public Services: Code of Practice, which required the Council to approve a treasury management strategy before the start of each financial year, a mid year report, and an annual report after the end of each financial year.


The annual treasury report had been prepared as required and covered:


  • the economy / interest rates in 2015/16;
  • the strategy for  2015/16;
  • the borrowing outturn for 2015/16;
  • investment outturn for 2015/16;
  • compliance with treasury limits and Prudential Indicators as shown in Appendix A as attached to the report 

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 were 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 a significant proportion of its funds with the 'Debt Management Account Deposit Facility' (DMADF) as these deposits were guaranteed by the British Government, although the interest rate was lower than some commercial banks.


Funds not placed in the DMADF were placed with other Local Authorities. These investments attracted a slightly more favourable rate of return but still gave priority to the security of funds invested. The Council's primary objective for the management of its debt was to ensure its long term affordability. The majority of its loans had therefore been borrowed from the Public Works Loan Board (PWLB) at long term fixed rates of interest. In 2015/16 the Council continued to finance a significant proportion of its capital expenditure from internal resources. The potential reduction of the Council’s investments balances at times of elevated credit risk was considered the most prudent option available to the Authority at this time.


Council approved the Treasury Management Strategy for 2015/16 at its meeting on 4 March, 2015, minute no. 938.


The Section 151 Officer advised that all treasury management activity undertaken during the financial year complied with the amended approved strategy, the CIPFA Code of Practice, and the relevant legislative provisions.


The overall return on investments for 2015/16 was 0.3403%.


At the meeting the Section 151 Officer commented that the Council’s Treasury Management was heavily influenced by external markets. She further commented that the Council had an annual Treasury Management Strategy which it had successfully worked within and achieved what it had intended to deliver.


This was a matter for Council decision


Cabinet, having considered the report and all the issues and implications contained therein


RESOLVED – T H A T the annual report on Treasury Management 2015/16 be accepted and that the report be referred to Council for approval.


Reason for decision


To accept and refer the report to Council.