Agenda item

This report outlines the Council’s prudential indicators for 2022/23 – 2024/25 and sets out the treasury strategy for this period. It fulfils three key reports required by the Local Government Act 2003:

·          reporting prudential indicators required by the CIPFA Prudential Code for Capital Finance in Local Authorities;

·          a treasury management strategy in accordance with the CIPFA Code of Practice on Treasury Management;

·          an investment strategy in accordance with the DLUHC investment guidance.

It also fulfils the statutory duty to approve a minimum revenue policy (MRP) statement for 2022/23.

The Principal Accountant introduced the report and explained it was to set the following strategies for the following financial year. They explained that the prudential and treasury management codes were both revised in December 2021 and their guidance notes were later circulated in January 2022. The Principal Accountant explained that the changes set out in paragraph 7 on page 87 of the document pack did not have a significant effect on Stroud District Council (SDC).

The Principal Accountant summarised the key points from the report which included:

• The ethical investment policy found on page 115 which would be reported back to the committee each quarter and revised annually.  
• Table 1, page 88 set out the Capital Budget.
• Table 2, page 89 identified the net financial need.
• Table 3, page 89, set out the councils borrowing need.
• New Benchmark investments were set out on page 103.

The Principal Accountant gave the following answers in response to questions asked:

• There was a £12m limit with Money Market Funds (MMF) and an £8m limit with individual banks however there was a £4m with any individual MMF.
• The rates with MMF were comparatively lower than alternative options.
• LINK Asset Services were the council’s treasury advisory. They have quarterly meetings with SDC and provided daily advice. Although they did not scrutinise work, they were available for advice should this be required.
• The Ethical Policy was a new policy for SDC and performance reports would be brought back quarterly to the Committee. 
• Page 93 set out the interest rates forecast. The aim with this was to layer the investments in order to have maturing investments at different periods during the year. This would then enable SDC to take advantage of higher investment rates when they were available.

Councillor Baker questioned the pension fund investments and whether there was any assurance that those investments were ethical. The Principal Accountant explained that the SDC pension fund was part of the larger Gloucestershire pension fund which was managed by the Brunel Partnership. They would follow the Gloucester investment policy of which SDC have little influence.

In response to questions from the Chair the Principal Accountant gave the following answers:

• Page 101 of the document pack – The reason for the difference in the interest rate between Thurrock District Council and Dudley Metropolitan Council was due to the length of investment and the time at which the investment was taken out.
• The net income of capital receipts from the sale of council houses under the right to buy scheme in 2021 was around £600k.
• On page 90, paragraph 2.8 showed the Housing Revenue Account (HRA) had made a payment into an earmarked reserve for the purpose of the repayment of the housing debt.

The Strategic Director of Resources confirmed that there was no legal requirement for the HRA to put aside money for the repayment of the Housing debt however it was best practice and they had begun to do so.

The Chair raised a question around the return of investments with organisations that provided social housing. The Principal Accountant confirmed that it was a category of investment that SDC could use however it would vary on what was available on the day.

Councillor Pearcy proposed and Councillor Hurst seconded.

After being put to a vote, the Motion was carried unanimously.