Agenda item

Glyn Daykin, Finance Analyst, introduced the Acting Corporate Director for Resources’ report which set out Treasury Management actions and performance to 30 September 2014.

The following key points were drawn to the Committee’s attention;

(a)  the new borrowing strategy for 2-14/15 is to raise up to £24.6m to finance new capital expenditure and replace maturing long-term debt. To 30 September no new long term borrowing has taken place;

(b)  the debt rescheduling strategy for 2014/15 is to consider any debt rescheduling or repayment opportunities which enable revenue savings to be generated in the year. To 30 September, no debt rescheduling had taken place;

(c)  the investment strategy for 2014/15 is to ensure the security of funds invested through the application of restricted counterparty list and the imposition of limits on the period and levels of individual investments and within those confines to maximise the return on investments;

(d)  the average return on investments from 1 April to 30 September was 0.64%. The 2014/15 budget assumed an average return of 0.68% for the period.

(e)  a rise in interest rates is predicted during the first half of 2015.

Councillor’s questions were responded to as follows by Finance Colleagues:

(f)  debt rescheduling did not take place as although opportunities are monitored, none were identified as being suitable, especially when the cost of moving debt is taken into consideration;

(g)  if interest rates were to change, the tools are in place, within the Treasury Management Strategy, to cope with this;

(h)  it would be more appropriate for Geoff Walker, as Acting Director of Strategic Finance, to respond to the concern that other Local Authorities are predicting that they will experience significant financial issues within the next 2 or 3 years and how similar influences may affect Nottingham City Council although it must be noted that there has been no wholly reliable analysis to suggest that the Councils in question will be become bankrupt. Medium Term Financial Planning helps to ensures long term stability, added to which reserves are reassuring and KPMG do not have any particular concerns regarding the current strategy and future of the City Council;

(i)  while some other Local Authorities, including Newcastle to which Nottingham is often compared, are predicting potential financial difficulties regarding some single issues, such as implementing safeguarding requirements for children and adults, which may demand more resources than those Councils are able to provide, this is potential risk for all Local Authorities and will be tacked if the issue arises in Nottingham;

(j)  the Section 151 Officer for Finance is fully informed and endorses all financial strategies and statements prior to Committee consideration. Added to which, the constant monitoring of ‘health indicators’ ensures processes are monitored and compliant;

(k)  Nottingham City does consider benchmarking against investment offers but as risk appetite varies, long term investments can skew the status of benchmarks.

RESOLVED

(1)  to note the treasury management actions taken in 2014/15 to date;

(2)  for the Acting Director of Strategic Finance, to respond directly to Members of the Audit Committee regarding the concern that other Local Authorities are predicting that they will experience significant financial issues within the next 2 or 3 years, and how Nottingham City Council may be affected;

(3)  for the Head of Strategic Finance to provide Committee Members with a ‘daily list’ of responsibilities of the financial Section 151 Officer, and details of the limit of their responsibilities;

(4)  for ‘Performance Management’ to be included within the future Member training schedule.