Agenda item

(To receive a report from Karen Tonge (Treasury Manager), which invites the Board to consider a report on the Treasury Management Strategy Statement and Annual Investment Strategy 2019/20, which is due to be considered by the Executive Councillor for Resources and Communications on 22 March 2019. The views of the Board will be reported to the Executive as part of its consideration of this item)

Consideration was given to a report by the Treasury Manager, which invited the Board to consider a report on the Treasury Management Strategy Statement Annual Investment Strategy 2019/20, which would be considered by the Executive Councillor for Resources and Communications on 22 March 2019. The views of the Board would be reported to the Executive Councillor as part of his consideration of this item.

The Board agreed to support the two recommendations in the report to the Executive Councillor for Resources and Communication.

The Board received clarification and explanations on the following points:

·         It was confirmed by Chris Scott from Link Asset Services that their rationale for the predicted increase in interest rates from 0.75% in March 2019 to 1% in June 2019 and 2% in March 2022 was predicated on a Brexit deal happening. It was noted that if there was a no deal for Brexit, these would need to be reviewed very quickly. Link Asset Services would be reviewing growth and inflation rates and a formal review is undertaken every three months, with the next one planned for May 2019 following publication of the Monetary Policy Committee's quarterly inflation report.

·         It was clarified that if a loan was paid off early; there would typically be a penalty where current rates were less than the rate of the loan in question. To benefit from an early repayment, the Council would then need to wait for interest rates to become lower before it would re-borrow. It was highlighted that one bank, RBS, was looking to shed its portfolio of LOBO loans which is why the Council's LOBO with RBS was settled in the last reporting period.

·         Confirmation was provided that if the minimum Long Term Rating needed to be reverted from A to A+, a formal decision by the Executive Councillor for Resources and Communication would be required. It was highlighted that the recent change was planned to coincide with the new Strategy.

·         Clarification was provided that one of the voluntary prudential indicators was effectively a self-imposed cap on the amount the Council could borrow by limiting the amount of the revenue budget that can be spent on debt repayment.

RESOLVED:

1.         That the Board support the recommendations to the Executive         Councillor as set out in the report.

2.         That the comments set out above be passed to the Executive            Councillor in             relation to this item.

12:15 Cllr H Marfleet left the meeting and did not return.