The Head of Financial Services has submitted a report which details the performance of the Treasury Management function for the six months to 30 September 2019.

The minutes of this meeting are available at Item 13a of this agenda.

Councillor Turner, the Cabinet Member for Finance and Asset Management, will present the report.

Recommendations: Cabinet recommends that Council:

1.          Approve the change of the Indirect Property Funds counterparty category to Pooled Investment Funds; and

2.          Note that the Council is considering investing in a Multi Asset fund instead of an Indirect Property Fund as was previously anticipated.

Council considered a report from the Head of Financial Services which detailed the performance of the Treasury Management function for the six months to 30 September 2019.

Councillor Turner, the Cabinet Member for Finance and Asset Management, presented the report. He confirmed that the Council did not invest in fossil fuels.

During the debate Councillor Upton undertook to provide a written response to a question from Councillor Gotch regarding the possibility of saving money if the City Council was to share the use of Cherwell District Council’s new cemetery in Kidlington. Cllr Turner clarified that any such proposal would not be a treasury matter.

Councillor Turner moved the recommendations, which were agreed on being seconded and put to the vote.

Council resolved to:

1.          Approve the change of the Indirect Property Funds counterparty category to Pooled Investment Funds; and

2.          Note that the Council is considering investing in a Multi Asset fund instead of an Indirect Property Fund as was previously anticipated.

The Head of Financial Services has submitted a report to report on the performance of the Treasury Management function for the 6 months to 30 September 2019.

Recommendations: That Cabinet resolves to:

1.    Note the performance of the Treasury Management function for the six months to 30th September 2019; and

2.    Recommend  Council to:

                      i.        Approve the change of the Indirect Property Funds counterparty category to Pooled Investment Funds;and

                    ii.        Note that the Council is considering investing in a Multi Asset fund instead of an Indirect Property Fund as was previously anticipated.

The Head of Financial Services had submitted a report on the performance of the Treasury Management function for the 6 months to 30^th September 2019.

Councillor Ed Turner, Cabinet Member for Finance & Asset Management, introduced the report which  provided the latest regular update to provide assurance that the Council’s funds were being invested as wisely as possible. While property investments continued to perform well, consideration was being given to investing in a Multi Asset Fund to reduce the reliance on property based income.

Cabinet resolved to:

1.Notethe performance of the Treasury Management function for the six months to 30th September 2019; and

2.Recommend  Council to:

i.Approve the change of the Indirect Property Funds counterparty category to Pooled Investment Funds; and

ii.Note that the Council is considering investing in a Multi Asset fund instead of an Indirect Property Fund as was previously anticipated.

Bill Lewis, Financial Accounting Manager, will be presenting the Treasury Mid-Year report. The Panel is asked to consider the report and make any recommendations to Cabinet accordingly.

Bill Lewis, Financial Accounting Manager, presented a report to the Panel on the Treasury Management mid-year Review.

The report was introduced as seeking to make a change to one area, to broaden Indirect Property Funds counterparty category to include Pooled Investment Funds, which would widen the Council’s opportunities to invest in areas, for example, such as social impact bonds which would not necessarily relate to property. The current budget had £10 million allocated to be invested into property funds specifically, but a broadening of the terminology would allow a greater diversification, thus reducing risk.

In considering the impact of the wider economy on the Council’s treasury position, the uncertainty relating to Brexit and the final shape of the UK’s relationship with the EU was recognised as being a significant challenge to making confident forecasts. The Council was working on the advice that some form of Brexit deal would be reached.

Investment levels were identified as £112m and had returned £0.5m above the budgeted sum. This was explained to be partially due to money having stayed invested for longer rather than going to the Housing Company, thereby allowing greater returns.

Looking at the Council’s property fund investments, healthy returns had been made from both the CCLA fund and the Lothbury fund from the time of investment. However, it was noted that their had been some recent tail-off in value, which was not attributed to regular variations around the proximity of dividend payments but due to the pressure on retail. The costs of repositioning portfolios away from retail had meant a lower unit value.  This provided greater surety against adverse future conditions in the retail market and it was reinforced that the Council still had a significant buffer before capital losses were realised.

The Council’s short term expectations for borrowing were reported to be a maintenance of existing borrowing within the HRA.

Following the presentation of the report the Panel raised questions over the status of a number of the investments referenced in the report, particularly Green Deposit Notice Accounts, which were explained to be six month notice accounts with variable, but stable, rates of interest. Due to the ownership of the fund being Barclays, the accounts were reported to be ultra-low AAA risk-rated.

The Panel sought information on what the rates of interest the Council would expect to face on its borrowing if there were to be a no-deal Brexit. In response, it was explained that estimates amongst experts varied considerably, making accurate forecasting difficult. It would be possible to present a range of possible outcomes, but making any prediction with a high degree of uncertainty would be harder. It was clarified that the Council’s PWLB borrowing was fixed at the time of borrowing and would not be subject to significant increase in the event of a no deal Brexit. On the basis of this, it was discussed whether the Council should be growing its borrowing whilst rates were low. Though the Council had looked at the possibility, it was  ...  view the full minutes text for item 35