Agenda item 4 - MTFS (Final) Cab 070213 , item 9. PDF 1 MB

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orrowing from investment balances (mainly reserves). This strategy, currently followed by the majority of local authorities, essentially involves lending investment balances to ourselves to reduce overall interest costs. As stated earlier, the Council’s aim is to reduce the level of borrowing and where possible reduce the level of overall borrowing outstanding. The MtC target for capital receipts from the sale of assets is £45 million by the end of 2014/15, which will be used to repay debt and/or finance capital expenditure to avoid new borrowing. A Disposal Schedule will be considered by Cabinet in February in line with the Disposal Strategy. M Prudential Code 55 In accordance with the Local Government Act 2003 the Council needs to comply with the “Prudential Code for Capital Finance in Local Authorities” (The Code). 56 Under the 2003 Act, Authorities have the freedom to determine the level of borrowing they wish to undertake to deliver their capital programmes. 57 The Code has been developed as a professional Code of Practice to support Local Authorities making these decisions. Regulations issued under the Act make compliance with the Code mandatory. 58 The objectives of the Code are: • To ensure that capital investment plans are affordable, prudent and sustainable. • To ensure treasury management decisions are taken in accordance with good professional practice. • To be consistent with good local strategic planning, asset management planning and option appraisal. 59 To demonstrate that these objectives have been fulfilled the Code sets out indicators that must be used and the factors which must be taken into account. The Council complies with the Prudential Code: • By having medium term plans (Corporate Strategy, Revenue and Capital budgets). • By having plans to achieve sound capital investment via the Capital Strategy, Project Appraisal and Asset Management Plans. • By complying with the Treasury Management Code of Practice. • By producing the indicators for affordability and prudence required by the Code. N Treasury Management 60 The Treasury Management Strategy Statement and Annual Investment Strategy (AIS) are shown in Annex 10 to this report. Annex 10 provides details of: • Treasury Management Strategy for 2013/14 including, borrowing, debt 23
escheduling, and investments. • Prudential Indicators. • Minimum Revenue Provision (MRP) Statement. • Policy on the use of Financial Derivatives. • Specified and Non Specified Investment for use by the Council. 61 During June 2012 a number of UK Banks were downgraded by the rating agencies. Despite this the majority still remained within our approved rating criteria, however Royal Bank of Scotland was removed from the counter party lending list as the short term rating criteria fell below that specified within our approved strategy. 62 In strict accordance with recommendations made by our Treasury Management Advisors, we are proposing the following key changes in relation to counterparty and credit risk. • Removal of the short term credit rating criteria for counterparties. The reason for this is that the long term rating is a better indicator of credit quality as it shows the longer term stability of the bank. • Maximum duration for all new term deposits increased to 2 years, with lower durations adhered to when advised by our Treasury Management Advisors. In addition under non specified investments now included are, “investments with Banks/Building Socities that do not meet specified investment criteria (on the advice of the Council’s Treasury Management advisors) with the approval of the Strategic Finance Director and Lead Cabinet member and/or the Leader of the Council”. The Audit Committee approved the strategy on 24 January, for recommendation to Council, and Cabinet are now also asked to approve the Treasury Management Strategy for submission to Council. O Risk Management Strategy 63 Risk Management is one of the key principles of good governance which is underpinned by public sector legislation. To ensure the Council continues to manage the risks and opportunities associated with the Council’s service delivery, a revised Risk Management Policy Statement and Strategy, has been developed to align with the Council’s New Operating Model and based on national Risk Management Standards and positives already achieved. This strategy is provided in Annex 11. The Strategy recognises that the next few years will present unprecedented challenges for the Council in delivering its services and corporate priorities. The strategy therefore requires risk management principles to be fully integrated into the Council’s strategic and operational management arrangements. The strategy is supported by a suite of detailed guidance and toolkits. The key change in the revised strategy is that it proposes that the Council’s overriding attitude is not to avoid risks but to operate in a culture of creativity and innovation to manage risks. To enable this, the key change is the formal introduction to “risk appetite” i.e. 24
Page 1 and 2: Gloucestershire County Council Medi
Page 3 and 4: 7 The capital budget strategy refle
Page 5 and 6: This will then provide a further £
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Page 9 and 10: for non Academy Schools. These amou
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Page 21 and 22: 2014/15 2015/16 £m £m Budget 420.
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Page 27 and 28: ANNEX 1.1 : COMMISSIONING INTENTION
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Scheme Name Prior Years 2011/12 £'
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Capital Programme Forecast - Decemb
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1. Background 1.1 The Chartered Ins
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5.3 Total borrowing requirement at
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7.8 Council’s Banker - The Counci
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Appendix A EXISTING PORTFOLIO PROJE
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4. Ratio of Financing Costs to Net
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9. Adoption of the CIPFA Treasury M
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Arlingclose’s Economic and Intere
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Specified Investments Appendix D Sp
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Councils Bank Account The Council b
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Notes: • This list could change i
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3. The Local Authority Mortgage Sch
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ANNEX 11 RISK MANAGEMENT STRATEGY 2
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Risk Management Policy Statement Gl
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What are our Strategic Risk Managem
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Appendix 1 - Risk Management Accoun
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Staff/Other Stakeholders ‣ Mainta
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Agenda item 4 - MTFS (Final) Cab 070213 , item 9. PDF 1 MB

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