Issue - meetings

The Cabinet Member for Finance and Central Services introduced the Treasury Management Strategy Statement Mid Year review for 2015/16.

The Cabinet Member referred to the low energy street light replacement programme, which the Cabinet had approved at its meeting on 10 November 2015. The proposals would involve the replacement of the borough’s existing street lights with low energy light emitting diode (LED) lanterns and entering into an agreement with the Green Investment Bank (GIB) to finance the procurement and replacement on an ‘invest to save’ basis. 

In response to questions from Councillors, the Cabinet Member confirmed that:

·  The Treasury Team were monitoring the Councils investments, particularly those at RBS and Lloyds, and would make sure the Council would not be exposed to risk;

·  With regard to the Council’s existing borrowing commitments, that they did not include any ‘toxic’ LOBO (Lender Option Borrower Option) arrangements, as stated at Assembly in July 2015; and

·  The Council would continue to invest in schemes, where appropriate, with the GIB.

Clarification was sought by Assembly regarding the following end dates for LOBO’s and the following confirmed by the Strategic Director, Finance and Investment:

·  Barclays (LOBO) – confirmed end date 30/05/2078

·  Dexia (LOBO) – confirmed end date 30/05/2077

·  RBS (LOBO) – confirmed end date 30/05/2060

·  RBS B (LOBO) – confirmed end date 30/05/2059

The Assembly resolved to:

(i)  Note the Treasury Management Strategy Statement Mid-Year Review 2015/16;

(ii)  Note that in the first half of the 2015/16 financial year that the Council complied with all 2015/16 treasury management indicators;

(iii)  Agree to maintain the delegated authority given to the Strategic Director of Finance and Investment, in consultation with the Cabinet Member for Finance, for the duration of the 2015/16 financial year to proportionally amend the counterparty lending limits agreed within the Treasury Management Strategy Statement to take into account the additional £89m from the European Investment Bank; and

(iv)  Authorise the Strategic Director of Finance and Investment to make the necessary adjustments to the Treasury Management Strategy to reflect the borrowing of funds and the Capital Financing Requirement to accommodate the additional borrowing arising from the Cabinet’s decision under Minute 67, 10 November 2015 to finance the Low Energy Street Light Replacement Programme via the UK Green Investment Bank’s Green Loan

The Cabinet Member for Finance and Central Services presented an update report on the treasury management activities during the current financial year.

The Cabinet Member commented that despite the effects of low interest rates, prudent investment management had enabled additional revenue to be made available to support the Council’s General Fund.  In respect of the Council’s investments at 30 September 2015, the Cabinet Member clarified the basis for increasing the maximum investment limit with the Royal Bank of Scotland from £50m to £90m and also responded to the suggestion that the Council should invest in the local housing market, although in respect of the latter point he agreed to keep the matter under review.

Cabinet resolved to recommend the Assembly to:

(i)  Note the Treasury Management Strategy Statement Mid-Year Review 2015/16;

(ii)  Note that in the first half of the 2015/16 financial year that the Council complied with all 2015/16 treasury management indicators;

(iii)  Agree to maintain the delegated authority given to the Strategic Director of Finance and Investment, in consultation with the Cabinet Member for Finance, for the duration of the 2015/16 financial year to proportionally amend the counterparty lending limits agreed within the Treasury Management Strategy Statement to take into account the additional £89m from the European Investment Bank; and

(iv)  Authorise the Strategic Director of Finance and Investment to make the necessary adjustments to the Treasury Management Strategy to reflect the borrowing of funds and the Capital Financing Requirement to accommodate the additional borrowing arising from the decision to finance the Low Energy Street Light Replacement Programme via the UK Green Investment Bank’s Green Loan.