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Waverley Borough Council Committee System - Committee Document

Meeting of the Executive held on 01/09/2003
APPENDIX C - TREASURY MANAGEMENT POLICY



Summary & Purpose
This report is the annual update of Waverley’s Treasury Management Policy which reviews the adequacy of the arrangements for the coming year.

Quality of Life Implications
Natural Resource Use
Pollution Prevention and Control
Biodiversity and Nature
Local Environment
Social Inclusion
Safe Communities
Local Economy
Natural
Resource Use
Pollution
Prevention and Control
Biodiversity
and Nature
Local
Environment
Social
Inclusion
Safe, Healthy
and Active
Communities
Local
Economy
N/A
N/A
N/A
N/A
N/A
N/A
Positive


APPENDIX C
WAVERLEY BOROUGH COUNCIL

EXECUTIVE – 1ST SEPTEMBER 2003
_________________________________________________________________________
Title:
TREASURY MANAGEMENT POLICY
[Wards Affected: N/A]
_________________________________________________________________________
Summary and purpose:

This report is the annual update of Waverley’s Treasury Management Policy which reviews the adequacy of the arrangements for the coming year.
_________________________________________________________________________
Quality of life implications – social, environmental & economic (sustainable development):

Natural Resource Use
Pollution Prevention and Control
Biodiversity and Nature
Local Environment
Social Inclusion
Safe, Healthy and Active Communities
Local Economy
N/A
N/A
N/A
N/A
N/A
N/A
N/A

E-Government implications:

There are no e-government implications.

Resource and legal implications:

There are no direct resource implications and the financial areas are covered in the report.
_________________________________________________________________________
Introduction and Background

1. In September 2002, the Council approved Waverley’s Treasury Management Policy which was prepared in accordance with the revised Chartered Institute of Public Finance and Accounting (CIPFA) Code of Practice on Treasury Management in Local Authorities.

2. Included within the Policy was that an annual review would be undertaken and reported to the Executive. In addition, a report showing the performance and investment activity for 2002-03 was accepted by the Executive in June 2003.

Review of the Policy

3. The policy continues to be robust and comply with good practice guidance. The main objective of the Treasury Management Policy will continue to be minimising the risks of the Council’s investments and safeguards will continue to ensure that this is achieved.
4. Under the Policy, the Director of Finance makes decisions regarding the period of investments and the organisations and products used, within specified limits. These decisions are based on an assessment of risk and the prevailing market conditions. During the past year, new investment accounts have been used which have low risk and good returns. They also have the flexibility of instant withdrawal of funds. It is proposed to maximise the use of these accounts in the coming year, subject to the specified limits.

5. In September 2002, the Executive approved the employment of treasury advisors on a self-financing basis. With the fall in interest rates and uncertainty about the implications of the Local Government Bill, this work has not yet been commissioned. However, it is now considered to be the appropriate time to seek external advice and it is proposed to undertake this exercise in the near future.

6. In the coming year, Waverley’s investments will continue to be managed in accordance with the Policy and, in particular, the following areas will be reviewed and reported back to the Executive:

- linking the investment limit to one borrower (currently 3m at any one time) to a risk assessment, taking into account the organisation’s credit rating; and
- the conclusions of any treasury advisors employed.

7. In addition, the impact of major Government changes will affect the Council’s Financial Strategy and in turn affect the Council’s Treasury Management Policy. Whereas the Council is currently debt free with the Treasury Management Policy focusing on investments, a future policy may also need to consider the implications of borrowing. These changes will result from:

- the Local Government Bill and the pooling of capital receipts
- the implications of the New Prudential System of Local Government Capital Finance with the option to borrow, and
- the withdrawal of Local Authority Social Housing Grant where housing resources are distributed using new funding mechanisms.

8. The Financial Strategy will be reviewed in the period to February 2004 when the Council’s 2004/05 Budget is approved.

Recommendation

It is recommended that the Executive notes the report.
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Background Papers (DoF)

There are no background papers (as defined by Section 100D(5) of the Local Government Act 1972) relating to this report.
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CONTACT OFFICER:

Name: Paul Wenham Telephone: 01483 523238

E-mail: pwenham@waverley.gov.uk

Comms/exec/2003-04/226