Agenda item

To review the Council’s Treasury Management activity for the first six months of 2020/21 and to provide an update on matters pertinent to future updates to the Council’s Treasury Management Strategy.

Members considered the Treasury Management Mid-Year Review 2020/21, presented by Mark Saunders.

Members asked questions, made comments and received responses as follows:

·         Councillor Booth asked for clarification regarding the Investment Portfolio and questioned whether the Council has any risk of concentration of investment, because of ratings that maybe applied to where the Council is investing? Mark Saunders stated that this is something that is monitored very closely, and the Treasury Advisers inform the Finance Department of any changes which happen to those type of institutions. He added that the Treasury Advisers are always consulted prior to the Council investing to ensure where we are investing meets the criteria that is required. Mark Saunders explained that there are not many changes to the short-term investments that the Council holds and if the situation becomes long term, then relevant advice will be sought.

·         Councillor Clark highlighted that no external borrowing is anticipated in 2021 and stated that officers have confirmed that this also includes the Investment Board. Mark Saunders explained that there is no anticipation for any external borrowing this year but work is underway to put schemes in place for the Commercial Investment Strategy and this borrowing strategy will be reviewed next year. Councillor Clark stated that he has noted in the press that property prices have seen a 5% increase due to the stamp duty holiday and there is forecast a 13.8% reduction in property for next year.

·         Councillor Booth stated that there have been a number of articles in the press with reference to potential abuses of drawing monies from the Public Works Loan Board, which Central Government have indicated that they will reviewing and he asked whether this would limit the opportunities of the Council to be able to borrow from the Government and mean that commercial loans would have to be used instead of the Public Works Loan Board? Mark Saunders explained that any monies borrowed in connection with the Commercial Investment Strategy would depend on the type of investment the Council is looking to do. He added that changes to the Public Works Board rules would not affect any of the schemes that the Council are looking at with the largest of those being considered being the Nene Waterfront scheme, which is a regeneration and housing scheme, which would not be impacted by any of the new regulations. He explained that those issues highlighted in the press are where authorities have borrowed money and then bought property for commercial gain.

·         Councillor Benney stated that there appears to be reluctance in investing in property and land with anything that is bought like this being a long-term investment and he feels that if land values fall that would be an opportune time to buy and the value of land will increase over a ten-year period. He expressed the opinion that caution would be a word he would use, but along with caution comes opportunity and there are opportunities for the Council to investigate going forward. Mark Saunders reiterated that advice is always sought from the Council’s Treasury Advisers, who are proactive in advising the Council of when it may be an appropriate time to consider any investment opportunities.

·         Councillor Wicks stated that in the current climate the future is uncertain of how long Covid 19 is going to impact us and he is pleased to see the cautious stance that is being taken and that advice is sought from the Treasury Advisers, who will be looking at the current time as well as the future.

·         Councillor Booth referred to a comment made by Councillor Benney and added to get the maximum benefit you should wait for the funds to fall to the lowest point before you commence buying. He added that due to Covid there is likely to be a cultural shift with regard to the use of office space going forward and in his opinion there needs to be a slight delay before any  major decisions are made with regard to potential investment in any office type infrastructure.

Corporate Governance Committee noted the report.