Issue - meetings

To consider a report of Cabinet setting out the mid-year treasury management activity.

The Council considered the report of the Cabinet (Item 9 in the Minute Book) setting out the treasury management mid-year position. In presenting the report, the Executive Member for Economic Development highlighted key areas of the report which demonstrated the Council was in a healthy position.

The Council’s debate focused mainly on the approach to risk in regard to borrowing, return on investments, both short and long term and investment in pooled funds as a way of managing risk against yield.  The performance of some investments was compared to that of district councils.  The Executive Member highlighted the importance of comparing the County Council against its peer group rather than district councils.

In conclusion, the Leader gave his assurance to the council and Hampshire residents and taxpayers that the Council takes careful and prudent advice from its officers and financial consultants, and the Council would not engage in speculative investment deals.

RESOLVED:

That the County Council noted the mid-year report on treasury management activity.

To consider a report of the Deputy Chief Executive and Director of Corporate Resources regarding treasury management activity during the year.

Cabinet received a report of the Director of Corporate Resources setting out the mid year treasury management position.

The report was introduced and it was confirmed that an annual mid-year update was required by CIPFA guidance. Key points relating to the borrowing position and investments were highlighted and it was confirmed that in all cases the levels of security, liquidity and return were considered in that order of priority. A shift in investments away from the banking sector, which was no longer Government protected and therefore entailed higher risk, was reported.

Cabinet noted the fast paced level of variation in the stock markets and felt that risks across different sectors should be balanced. It was confirmed that this was continuously being done and agreed that future reports also include reference to the stress testing of banks with regard to their investment potential.

The high levels of return demonstrated in table 4 of the report were welcomed and it was noted that this was at lower levels of risk than those associated with property investment.

The recommendations in the report were considered and agreed. The decision record is attached.