Agenda item 4 - MTFS (Final) Cab 070213 , item 9. PDF 1 MB
Agenda item 4 - MTFS (Final) Cab 070213 , item 9. PDF 1 MB
Agenda item 4 - MTFS (Final) Cab 070213 , item 9. PDF 1 MB
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escheduling, and investments.<br />
• Prudential Indicators.<br />
• Minimum Revenue Provision (MRP) Statement.<br />
• Policy on the use of Financial Derivatives.<br />
• Specified and Non Specified Investment for use by the Council.<br />
61 During June 2012 a number of UK Banks were downgraded by the rating agencies.<br />
Despite this the majority still remained within our approved rating criteria, however Royal<br />
Bank of Scotland was removed from the counter party lending list as the short term rating<br />
criteria fell below that specified within our approved strategy.<br />
62 In strict accordance with recommendations made by our Treasury Management Advisors,<br />
we are proposing the following key changes in relation to counterparty and credit risk.<br />
• Removal of the short term credit rating criteria for counterparties. The reason for<br />
this is that the long term rating is a better indicator of credit quality as it shows the<br />
longer term stability of the bank.<br />
• Maximum duration for all new term deposits increased to 2 years, with lower<br />
durations adhered to when advised by our Treasury Management Advisors.<br />
In addition under non specified investments now included are, “investments with<br />
Banks/Building Socities that do not meet specified investment criteria (on the advice of the<br />
Council’s Treasury Management advisors) with the approval of the Strategic Finance<br />
Director and Lead <strong>Cab</strong>inet member and/or the Leader of the Council”.<br />
The Audit Committee approved the strategy on 24 January, for recommendation to<br />
Council, and <strong>Cab</strong>inet are now also asked to approve the Treasury Management Strategy<br />
for submission to Council.<br />
O<br />
Risk Management Strategy<br />
63 Risk Management is one of the key principles of good governance which is underpinned by<br />
public sector legislation. To ensure the Council continues to manage the risks and<br />
opportunities associated with the Council’s service delivery, a revised Risk Management<br />
Policy Statement and Strategy, has been developed to align with the Council’s New<br />
Operating Model and based on national Risk Management Standards and positives already<br />
achieved. This strategy is provided in Annex 11.<br />
The Strategy recognises that the next few years will present unprecedented challenges for<br />
the Council in delivering its services and corporate priorities. The strategy therefore<br />
requires risk management principles to be fully integrated into the Council’s strategic and<br />
operational management arrangements. The strategy is supported by a suite of detailed<br />
guidance and toolkits.<br />
The key change in the revised strategy is that it proposes that the Council’s overriding<br />
attitude is not to avoid risks but to operate in a culture of creativity and innovation to<br />
manage risks. To enable this, the key change is the formal introduction to “risk appetite” i.e.<br />
24