Issue - meetings

RESOLVED:

1.     That the Council enter into the Municipal Bond Agency Framework Agreement and Guarantee; and that authority be delegated to the Director of Finance and the Director of Legal, Democratic and Cultural Services to execute the Framework Agreement and  Guarantee together with associated legal documentation;

2.     That borrowing decisions be delegated to the Director of Finance in consultation with the Leader of the Council or the Cabinet Member for Business Services and Resident Experience.

Reasons for decisions:

It is anticipated that the Municipal Bond Agency will provide the council with an alternative source of borrowing capital funds at more favourable interest rates than those available from the PWLB.

The recently revised Treasury Management Strategy 2016/17 means that there is no immediate need to borrow from the Municipal Bond Agency. Until the Council borrows, there is no financial risk to the Council in joining the Municipal Bond Agency Framework and Guarantee. If the current interest rate situation alters, the Municipal Bond Agency option could be an attractive borrowing option.

The Cabinet Member for Business Services and Resident Experience explained that the Council was already a shareholder in the UK Municipal Bonds Agency (MBA) and that this was established by the Local Government Association (LGA) and 56 local authorities, for the purpose of enabling local authorities to borrow on more favourable interest rates than would otherwise be available to the council and to provide an alternative to the Public Works Loan Board (PWLB).

She informed the Cabinet that in order to be able to borrow for the purposes of capital funding from the MBA, a local authority must first accept the terms of a Framework Agreement and agree to joint and several guarantee.

She stated that the Council would not be looking to borrow at this time however if such a time arose, the rates would be more favourable.

The report received from the Council Overview Board was referred to and it was agreed that where time allowed, scrutiny of initial borrowing would take place. It was also agreed that recommendation 2 would be revised to include the Leader of the Council.

Members felt that this was an excellent proposal and evidence showed that it worked well in the USA.

RESOLVED:

1.     That the Council enter into the Municipal Bond Agency Framework Agreement and Guarantee; and that authority be delegated to the Director of Finance and the Director of Legal, Democratic and Cultural Services to execute the Framework Agreement and  Guarantee together with associated legal documentation;

2.     That borrowing decisions be delegated to the Director of Finance in consultation with the Leader of the Council or the Cabinet Member for Business Services and Resident Experience.

Reasons for decisions:

It is anticipated that the Municipal Bond Agency will provide the council with an alternative source of borrowing capital funds at more favourable interest rates than those available from the PWLB.

The recently revised Treasury Management Strategy 2016/17 means that there is no immediate need to borrow from the Municipal Bond Agency. Until the Council borrows, there is no financial risk to the Council in joining the Municipal Bond Agency Framework and Guarantee. If the current interest rate situation alters, the Municipal Bond Agency option could be an attractive borrowing option.