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Waverley Borough Council Committee System - Committee Document

Meeting of the Executive held on 03/06/2003
Treasury Management - Borrowing and Investment Transactions and Performance Measurement



Summary & Purpose
The purpose of this report is to summarise Waverley’s investment performance in accordance with Waverley’s Treasury Management Policy and the Code of Practice on Treasury Management in Local Authorities.

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APPENDIX N
WAVERLEY BOROUGH COUNCIL

EXECUTIVE– 3RD JUNE 2003

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Title:
TREASURY MANAGEMENT - BORROWING AND INVESTMENT
TRANSACTIONS AND PERFORMANCE MEASUREMENT

[Wards Affected: N/A]
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Summary and purpose:

The purpose of this report is to summarise Waverley’s investment performance in accordance with Waverley’s Treasury Management Policy and the Code of Practice on Treasury Management in Local Authorities.

_________________________________________________________________________

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.

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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 regular reports on performance and transactions were to be prepared. This report shows the rate of return from the Council’s investments for the half-year ended 31st March 2003 and the rate of return for the whole of the 2002/03 financial year and that rate of return has been measured against a predetermined base. A summary has also been prepared to show the total investment during the same half-yearly period.

Investments - Performance Measurement

3. The annual rate of return on the Council's investments for the half year ended 31st March 2003 was 3.92%. Waverley’s criteria for comparative purposes is the London Inter-Bank Bid Rate (LIBID) seven-day and three-month rates. These have been calculated at 3.59% and 3.81% respectively. This comparison is used as it gives a good indication of the average rates achieved in the investment market that is most relevant to Waverley’s investment activity.

The annual rate of return for the 2002/2003 financial year has been determined at 4.00% with the comparative seven-day and three-month rates being 3.59% and 3.90% respectively. As can be seen in Annexe 1, the rate achieved by the Council compares favourably with the pre-determined rates. However, it is slightly below the estimate due to the difficult market conditions arising from the decline in rates.

4. For information, the Local Performance Indicator (LOBT3) which relates to investment performance is shown below:-

Full Description of PI
2001/2002
Actual
2002/2003
Target
2002/2003
Actual
2003/2004
Target
Average rate of return on the Council’s investments compared with the average seven-day LIBID rate (London Inter-Bank Bid Rate)
0.58% above
the LIBID
rate
0.45% above
the LIBID
rate
0.41% above
the LIBID
rate
0.60% above
the LIBID
rate

Investment Transactions

5. The analysis below shows the total transactions during the period 1st October 2002 to 31st March 2003 in respect of all external investments undertaken by the Council, together with balances outstanding as at 31st March 2003.

Investments

Balance at
1st October 2002

Total Lent


Total Repaid

Balance at
31st March 2003

Temporary
Investments
29,950,000 80,720,000 85,070,000 25,600,000

6. The temporary investments (i.e. investments repayable to the Council within one year) outstanding as at 31st March 2003 comprise 23,250,000 invested with building societies and 2,350,000 with approved banks which is in accordance with the Council's approved investment policy.

Recommendation

It is recommended that the report on this matter be accepted.

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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/executive/2003/04/016