URL: https://stroud.moderngov.co.uk/ieDecisionDetails.aspx?ID=213

Decision Maker: Council, Audit and Standards Committee

Outcome:

Is Key Decision?: No

Is Callable In?: No

Purpose: To advise on the treasury management activities in 2023/2024, in accordance with the Council’s Treasury Policy Statement. To report on actual 2023/2024 Prudential Indicators in accordance with the requirements of the Prudential Code.

Content: Councillor Hughes, the Chair of Audit and Standards Committee, introduced the report and highlighted the following key points: ·         Page 28 included a table showing an overview of borrowing and investment balances. ·         Borrowing had remained constant whilst investments had decreased. ·         The investment strategy had been agreed by Council in 2023, there were some elements of the strategy that the council had little control over. ·         Investments needed to provide security, liquidity and yield, where the expected results were fairly equal the council had agreed that it could also consider environmental, social and governance elements. ·         There was a limit of around 15 million for long term investment, they currently had approximately 10 million invested. ·         The Lothbury Property Fund was closed to withdrawals, attempts to merge the fund had collapsed and it was formally terminated at the end of May. They had lost just over £1m. The Council had a risk reserve so it wouldn’t impact the revenue budget. During the length of term of the fund the Council had accrued £425k income from the fund and therefore this had reduced the overall loss to £578k. ·         In November, prior to the Audit and Standards Committee Meeting, Camdor, who provide the ESG rating reports, would be giving a presentation which Members could attend. ·         The average interest rate on the Councils principal investment was 5.04% and on the long term investment was 0.16% in part due to the loss as a result of the termination of the Lothbury Property Fund.   Councillor Caton-Hughes raised concerns regarding the UK inflation report in Appendix 4 page 85 and wanted to ask for information about the impact of inflation on Stroud District residents, particularly those who were financially disadvantaged. Councillor Hughes advised that the appendix was aimed at how treasury management was carried out and suggested that her valid points might be more appropriate for other Committees to consider.   Councillor Moore asked how the Council determined how much money to invest. Councillor Hughes advised that they were provided with external advice and the Council had a low appetite for risk. Councillor Pearcy confirmed that they had a very strong and professional treasury management team who were supported by advisers as to where to place the investments and were also constrained by the frameworks in place.   Councillor Turner asked whether there were plans to review and expand the ethical investment policy. Councillor Hughes confirmed that there were limitations as to what they could do due to the constraints and he would take this question away to check when it was planned for review.   Proposed by Councillor Hughes and seconded by Councillor Pearcy   Councillor Baxendale raised concerns with investing in property and hoped that the Council were able to learn some lessons from the closure of the Lothbury Property Fund.   Councillor Braun advised that she was pleased to see that they were taking environmental, social and governance issues more seriously when placing investments.   Councillor Pearcy provided further information about the Lothbury Property Fund and confirmed that only a small amount was included in the fund as they had recognised that it was a higher risk. He advised that the Council was very fortunate to have a robust finance team and commended the report to all Councillors.   On being put to the vote, the Motion was carried unanimously.   RESOLVED To approve the treasury management activity annual report for 2023/2024 and the actual Prudential Indicators.    

Date of Decision: July 18, 2024