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To approve as a correct record the Minutes of the meeting held on 8 January, 2018, copy attached as an appendix.
That the minutes of the meeting held on 8 January, 2018, be approved as a correct record.
To consider the attached report.
Contact Officer: Nuala Donnelly (01296) 585164
The Committee received a report on the Treasury Management Strategy for 2018/19. The Treasury Management Statement, Treasury Management Strategy Statement and the Annual Investment Strategy, attached as appendices to the Committee report, would be reported to full Council on 22 February, 2018, for approval.
The annual Treasury Management Strategy included Prudential Indicators that were used as part of the self governance framework. The Committee report provided supplementary background information to the Strategy and summarised a number of issues. The key messages were:-
· Investments – the primary governing principle would remain with security over return and this was reflected in the criteria for selecting counterparties.
· Borrowing – overall, this remained fairly constant over the period covered by this report and the Council would remain under-borrowed against its borrowing requirement due to the higher cost of carrying debt.
· Governance – strategies were reviewed by the Audit Committee with continuous monitoring which included Mid-Year and Year End reporting.
The Prudential Code for Capital Finance in Local Authorities (the Code) was a professional Code that set out a framework for self-regulation of capital spending; in effect allowing councils to invest in capital projects which best met their service delivery objectives as long as they were affordable, prudent and sustainable, subject to Government reserve powers to restrict borrowing for national economic reasons.
The Code required the Council to agree and monitor a number of prudential indicators covering affordability, prudence, capital expenditure, debt levels and treasury management. The indicators also formed the basis for in-year monitoring and reporting.
Thelimitsand indicatorsthat the Authority were requiredtodetermineby the code were:-
Capital and Debt Indicators
· Capital Expenditure – representedtheagreedCapital Programmeand set out the plannedcapital expenditureoverthenext three years.
· Capital Financing Requirement – theamount the Authorityneeded toborrowinorder to deliveritsCapitalExpenditureplans.
· Affordability Index – this was the proportion of the Authority’sincomethat was takenup by loanrepaymentsand interest. The moretheAuthor ... view the full minutes text for item 2.
To discuss and comment upon the attached report.
Contact Officer: Nuala Donnelly (01296) 585164
The Council had undergone significant changes in the last 2 years with major organisational restructuring and changes. At its meeting in November 2017, the Finance and Services Scrutiny Committee had recommended that the Quarterly Finance Digest be refreshed to ensure that Members were getting sufficient information to understand the financial position of the Council and any inherent and emerging risks.
Financial Reporting Requirements
The Council needed to demonstrate how well money was being spent and then report it appropriately. There were a number of good principles in relation to this, namely:
· Members should receive regular and accurate accruals based financial information including the risks to the financial position and how they are being managed.
· Information for Committees should be summarised appropriately, and provide details on the next steps/ required actions.
· The level of information should be commensurate with decision making required.
· Committee Members should receive regular and accurate information on the balance sheet.
· There should be a link to operational performance and financial reporting.
· Reporting needs should be informed by users
· Reports should be user friendly and understandable, and financial terminology explained
· Reports should be indicative that financial performance was aligned to operational performance.
· Allow for exception reporting/ RAG rated, with appropriate risks highlighted.
A number of options had been considered on how financial information could be presented to Members, who would also receive annual financial information as part of the Annual report.
Currently, the Quarterly Finance Digest was the main vehicle for reporting to Members on the Council’s financial performance to Members. Recent feedback from Internal Audit and from the Scrutiny Committee suggested that whilst this provided a good financial overview of the Council, some additional information was required.
One option would be for interim changes to be made to the current reporting format that would allow for immediate progression on changes to reporting of information.
Work was progressing to review the content of the Quarterly Finance Digest for the third quarter of 2017/18 and the following was being suggested:
· a move to a more narrative report – taking the variance analysis from the tables to a narrative report.
· The narrative report would give an overview of the financial position and provide additional narrative on exceptional areas only by portfolio
· An organisation overview would be produced with a report on costs and income, and the net position. The spend would also be split between pay and non-pay costs to give further granularity of detail. This could be at portfolio level.
· subjective level analysis would be available, e.g. spend on areas of interest e.g. agency spend /forecast by Portfolio.
· The report would identify variance to plan and outline actions plan/corrective actions being taken to address emerging issues.
· Additional narrative on cash and treasury.
· Performance against capital budgets
· Some comments had been raised by members re: budget profiling. This would be reviewed when reporting and commented upon as appropriate.
· Aim to produce reports within 6 weeks of end of period
A second option would involve a longer-term project to develop reporting ... view the full minutes text for item 3.
To consider the future work programme. Meetings are scheduled as follows:-
4 April 2018
1. Quarterly Finance Digest
9 July 2018
1. Leisure Centres Management Contract
2. Quarterly Finance Digest
15 October 2018
No items as yet
The Committee considered the work programme for the period up until October 2018.
The future work programme be agreed as follows:-
(i) 4 April 2018 – Contract Management / Procurement Update, Quarterly Finance Digest.
(ii) 9 July 2018 – Leisure Centres Management Contract, Quarterly Finance Digest.
(iii) 15 October 2018 – No items as yet.
To be timetabled: Budget Monitoring (challenge new areas of savings), Connected Knowledge programme update.