Issue - meetings

This report summarises the council’s treasury management activity during 2015/16.  The report will include the latest risk register for Treasury Management.

Declarations of interest:

None.

Witnesses:

Phil Triggs, Strategic Manager Pensions and Treasury

Key points raised during the discussion:

1. The Committee discussed the low interest rate environment that had continued for the last seven years and that in comparison with other councils, Surrey was in the lower quartile in terms of its debt cost.
2. The Chairman reported that he had invited Arlingclose, the new external Treasury Advisor to the next committee meeting when a training session would be provided following that meeting.
3. There was a discussion regarding Brexit and what assessments were being undertaken to ensure investments were the right ones.
4. In relation to Brexit, the Strategic Manager Pensions and Treasury explained that:

·         Brexit was the number one risk on the treasury risk schedule

·         There had been some unexpected surprises following Brexit in that the FTSE100 index had seen healthy increases.

·         Gilt prices had risen and yields had fallen which was favourable for local authorities.

·         The Bank of England’s Monetary Policy Committee had met in the previous month and had decided to take no action.

·         It was suspected that the current base rate may reduce at the August meeting and the level of quantitative easing may be increased.

·         It was reported that officers were carefully monitoring the investment/financial horizon and constantly looking for warning signs in order that there  would not be a repeat of the Icelandic issue in Surrey.

·         In July, full council approved a revised treasury management strategy that will result in cash balances being further reduced and short term borrowing increased in order to reduce risk.

Action/Further information to note:

The Chairman asked that Members send any questions regarding treasury to the Strategic Manager Pensions and Treasury before the next committee meeting and training session in September.

Resolved:

1.    That the content of the Treasury Management Annual Report for 2015/16 was noted.

2.    That the revised Treasury Management Risk Register, shown in Annex 3 of the report be adopted.