Agenda item

Treasury Management Strategy Statement and Annual Investment Strategy 2021/22 to 2023/24.

Minutes:

The Chairman drew attention to the role of the Audit Committee in scrutinising reports.

 

Peter Stuart, Head of Corporate Resources introduced the report.  He highlighted the proposed change to the Investment Policy as the Council is receiving additional funds at short notice from central government. The changes are required to prevent a breach of the existing counter party limits, he noted the lag between receipt of funding and payment out to businesses.

 

Members discussed the capital financing requirement, debt rescheduling and the ratio of financing costs to revenues streams.  They debated the use of ethical investments, the addition of AL Rayan Bank Plc, investment in Town and Parish Councils and interest rates.

 

Pamela Coppelman, Treasury Advisor for Adur-Worthing Council and Mid Sussex District Council confirmed that a report would be represented to the committee if a rescheduling of debt was proposed.  She noted that the Council would still be liable for interest on any loan. 

 

The financial markets are constantly reviewed for potential investments taking into consideration security, liquidity and yield. The list of specified banks is a list for the committee to approve and due diligence is always done before placing funds. AL Rayan Bank Plc stood out for ethical reasons and was included as the committee had asked for this type of investment.  Currently there was no commitment to invest in Al Rayan Bank Plc.

 

She noted that the format of the report is prescribed by the government. The Council’s ratio of financing costs to net revenue streams is very low (around 1%)  which is good.  Interest rates will remain low for a couple of years but it is hoped by 2023/24 they will improve. The Council will have paid off more of the outstanding debts and the ratio will improve.

 

The Chairman expressed concern of the possible addition of  Al Rayan Bank Plc which is regulated by the Financial Conduct Authority,  a sharia bank owned by Qatar Bank. He advised that the usual checks and balances are completed prior to selection of any counter party institution.

 

The Head of Corporate Resources confirmed the criteria had not changed and the only addition was the proposal to add AL Rayan Bank Plc. 

 

In response to the Chairman’s concern the Treasury Officer advised that Appendix G is a list of countries with a sovereign credit rating of AA- and above.  The list is supplied by the treasury advisors for information, there are currently no investments in foreign banks.  Interest rates have not been quoted as they change on a daily basis, rates are checked and authorisation is obtained from the Head of Corporate Resources before placing funds. Any investment in AL Rayan Bank Plc would be for a fixed term at a  fixed rate.  She confirmed the treasury advisors check the counter party statements before investing.

 

The Chairman noted the robust discussion and as there were no further questions the Chairman took Members to the recommendations in the report which were agreed unanimously.

 

RESOLVED

 

The Committee received and noted the report.

 

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