(KEY DECISION)

Report No. 6/2018 from the Director for Resources was received.

Mr S Della Rocca, Assistant Director – Finance, introduced the report, the purpose of which was to set out the expected treasury and capital investment operations for 2018/19, linked to the Council’s budget, Medium Term Financial Strategy and Capital Programme. It delivered on key legislative requirements and incorporated requirements introduced in recent updated guidance.

During his introduction, Mr Della Rocca confirmed that the focus remained on short term investments at present and that the Council would continue to look to repay borrowing where there was a financial business case.  The Report looked for approval for a £10m fund for commercial investments, along with £50k start-up fund for such potential investments from the Invest to Save reserve.  These funds would be subject to the Commercial Investment Policy contained within the report (Appendix 2).  It was envisaged that such investments would assist in closing the funding gap highlighted in the Budget report.  In order to facilitate this fund the Prudential Indicators would be increased in the Treasury Management Strategy as detailed in the recommendations.  The Report brought together a number of plans and policies.

During discussion the following points were raised:

1. It was confirmed that investments would initially be made within Rutland and/or for the benefit of Rutland residents.  This would be kept under review should there be no suitable opportunities; and
2. The skills and knowledge required in order to ensure the successful implementation of the Capital Strategy were listed at item 9 of the Strategy (Appendix 2) and had been incorporated into the recruitment criteria for the post of Strategic Director for Places which was currently in progress.

DECISION

1)    Cabinet RECOMMENDED TO COUNCIL to approve:

a)    The Treasury Management Strategy in Appendix 1 to Report No. 6/2018 including the Investment Strategy, Borrowing strategy, Minimum Revenue Provision statement and Capital Expenditure Prudential indicators.

b)    The Capital Investment Strategy in Appendix 2 to Report No. 6/2018.

c)    The establishment of a £10m fund for commercial investments to be used in accordance with Commercial Investment Policy in Appendix 2, Annexe B1 to Report No. 6/2018.

d)    An increase in the Authorised Borrowing Limit to £33m (previously £28m) and the Operational Boundary to £28m (previously £23m).

e)    Use of £50k as a start-up fund from the Invest to Save reserve (as required) to fund any pre acquisition costs associated with potential investments.

Reasons for decision

1.    The Council was required to approve a Treasury Management Strategy and Capital Strategy.

2.    Investment interest rates were expected to remain low in the short term and in order to maximise the returns available, various changes had been recommended including approval of a Capital Investment Policy for Non Treasury investments.

3.    The Council was not planning to repay existing borrowing but was asked to approve increases in borrowing to fund investments which would yield a positive impact on the MTFP.