To note the Council’s treasury management activities for the period 1 April 2008 to 31 March 2009 and the outturn of prudential indicators for the year 2008/09.

The Cabinet Member Resources presented the report, which summarised activity through the year and stated that although the authority had not initially been affected by the banking crisis with investments in Icelandic banks, the impact was now being felt with the lack of investment criteria.  It was added that borrowing was under budget for 2008/09 and requested that the congratulations of Cabinet be passed on to the treasury management team for their hard work.

The Acting Head of Financial Services advised Cabinet that:

·         Treasury management activity complied with the CIPFA code of practice.

·         Investments had made a surplus of £483k and in addition borrowing costs were £245k less than expected.  Overall this had been an unprecedented year in treasury management.

·         The main impact for this year had been the reduced interest rates for investments.

·         There had been a change of direction from borrowing externally to borrowing internally and using internal reserves.  This was because of the low rate of return on external investments and that it was more cost effective to use our on funding to support borrowing in the short term.

·         The Council had not been subjected to the losses faced by other councils as a result of the Icelandic bank collapse.

·         On referring to page 194 regarding the Council’s borrowing transactions for 2008/09 advised that the £118m was total borrowing, a large proportion of which was funded by money the government provides in the annual settlement to make the payments on loans.

·         On referring to Annex C of the report regarding capital finance requirements, Cabinet was advised this related to funding of assets and long term borrowing whether internal or external.

·         Most investments made were currently short term and the treasury management team were constantly looking ahead and reacting to the markets daily.

RESOLVED

                        THAT:

a)                  the treasury management report be noted; and

b)                 staff be congratulated on the treasury management performance during this particularly challenging economic year.

EXCLUSION OF THE PRESS AND PUBLIC

NOT FOR PUBLICATION BY VIRTUE OF SECTION 12A OF THE LOCAL GOVERNMENT ACT 1972.

ESG RETAIL QUARTER DEVELOPMENT AGREEMENT

Cabinet approved the confidential minutes of the ESG Retail Quarter Development Agreement.

Not for publication: This item discloses information relating to the financial or business affairs of any particular person (including the authority holding that information).