To agree the Annual Capital and Treasury Strategy for 2021/22 (including Prudential and Treasury Indicators) for submission to Council on 29 March 2022, subject to consultation with the Resources and Services Overview Scrutiny Committee.

RESOLVED that Cabinet agrees that -

a)     the Annual Capital and Treasury Strategy for 2022/23 (including Prudential and Treasury Indicators) be submitted to Full Council for its approval, subject to consultation with the Resources and Services Overview and Scrutiny Committee; and

b)     the Portfolio Holder for Corporate Finance and Governance be authorised to explore potential borrowing options associated with the redevelopment of the Honeycroft site for inclusion within the Annual Capital and Treasury Strategy that would be presented to Full Council on 29 March 2022.

Cabinet gave consideration to a report of the Corporate Finance & Governance Portfolio Holder (A.5) which sought its approval of the Annual Capital and Treasury Strategy for 2021/22 (including Prudential and Treasury Indicators) for submission to Council on 29 March 2022, subject to consultation with the Resources and Services Overview Scrutiny Committee.

Members were reminded that the Local Government Act 2003 and supporting regulations required the Council to set out its treasury strategy for borrowing, and to prepare an Annual Investment Strategy (as required by Investment Guidance subsequent to the Act) that set out the Council’s policies for managing its investments and for giving priority to the security and liquidity of those investments, “having regard” to the Chartered Institute of Public Finance and Accountancy’s (CIPFA) Prudential Code and the CIPFA Treasury Management Code of Practice.

Cabinet recalled that the current editions of the above codes that the Council’s capital and treasury activities reflected had been issued in December 2017. These included the requirement to publish a Capital Strategy, which from 2019/20 had been combined with the Treasury Strategy into one document, and which was required to be updated / approved annually.

Cabinet was informed that CIPFA had published revisions to both of the above codes in December 2021, but as part of the associated announcements, they had confirmed that they would not be fully implemented until the 2023/24 financial year. Local Authorities therefore did not have to amend or revise the Capital and Treasury Strategy for 2022/23. However, CIPFA had stated that Local Authorities should make their best endeavours to adhere to the new provisions and not undertake any new investments which would not be consistent with those changes.

It was reported that, although the revised codes would be reflected in future years, there were no changes included within the proposed Capital and Treasury Strategy for 2022/23 that conflicted with the aforementioned request to ensure new investments followed the new provisions.

The proposed Annual Capital and Treasury Strategy for 2022/23 was before the Cabinet, as set out in Appendix A to item A.5 of the Report of the Corporate Finance & Governance Portfolio Holder.

Members were made aware that the Capital Strategy element of the combined document covered the various elements surrounding capital investment decisions and the key criteria that investment decisions should be considered against.

Members were further informed that the Treasury Strategy element of the combined document covered the various elements that satisfied the requirements of the various codes that governed the borrowing and investment activities of the Council and had been prepared in the light of advice received from the Council’s Treasury advisors and reflected the relevant codes and guidance.

The Prudential and Treasury indicators were included as an Annexe to the combined strategy and were therefore included within the aforementioned Appendix A.

Cabinet was advised that, under the Prudential Code, the Council had freedom over capital expenditure as long as it was prudent, affordable and sustainable. The Prudential Indicators either measured the expected activity or introduced limits upon  ...  view the full minutes text for item 135