Scottish Borders Council

Agenda and draft minutes

Venue: Council Chambers. Council Headquarters, Newtown St Boswells

Contact: Jenny Wilkinson  Tel: 01835 825004 Email:  jjwilkinson@scotborders.gov.uk

Items
No. Item

1.

Treasury Management Strategy 2019/20 pdf icon PDF 179 KB

Review and comment on the Treasury Management Strategy 2019/20.

 

Papers attached:-

(a)     Treasury Management Strategy 2019/20 report to Council;

(b)     Appendix 1 to Council report – Treasury Management Strategy

(c)     Briefing Note by Chief Financial Officer.

Additional documents:

Minutes:

With reference to paragraph 5 of the Minute of Meeting of 14 February 2019, there had been circulated copies of a Report and Appendix on the Treasury Management Strategy 2019/20, along with a briefing note by the Chief Financial Officer, explaining the changes to the report.  The Chief Financial Officer, Mr Robertson, explained that the report which had been circulated at the previous meeting had not been the final version and the correct version had been issued via email to members of the Committee after the meeting.  Subsequent to the circulation of the revised Treasury Management report, a later amendment to the Administration’s draft budget for 2019/20 - 2023/24 was also published.  This amendment would raise Council Tax by 1% which would be applied in future years to provide a matched contribution to the capital costs of replacing Hawick High School.  A corresponding amendment was therefore required to the Administration’s draft capital budget and corresponding amendments were therefore also required to the Treasury Management Strategy, including amendment of the prudential indicators, to reflect the material change proposed.  Mr Robertson highlighted the main changes to both the covering report and the actual Strategy.  In response to Members’ wider questions, Mr Robertson advised that while the Council had purchased the Lowwood Estate and that was reflected in the capital expenditure figures within the Treasury Management Strategy figures and included in the Council’s future capital financing requirement, no borrowing had as yet taken place for this, the site purchase being financed temporarily from cash flow.  Assumptions had been made in the Strategy that parts of the site would be developed and sold off over the coming years.  The Pensions & Investments Manager, Kirsty Robb, further advised that any borrowing by the Council was made on a total needs basis and not per project, with cash flow monitored daily and short term loan opportunities taken up to minimise Council debt on an ongoing basis.  With regard to the changes in capital financing requirement and the operational boundary for external debt, Mr Robertson explained that while the level of external debt was projected to increase closer to the operational boundary, this was an inevitable consequence of the accelerated build programme proposed for the new High Schools.  Consideration also needed to be given to the impact of greater borrowing for capital projects on the revenue budget which would result in an increased percentage of the revenue budget being used for repayment of loan charges.  With regard to any impact from current political uncertainties, although Brexit was a major consideration, with regular updates received from the Council’s Treasury advisers, it was anticipated that while there was the potential for a short term rise in interest rates, this was not likely to impact on the medium to long term.  The Council was closely monitoring the potential impact of Brexit and the associated risks, including a short term impact on inflation.  Any borrowing to provide an additional cash cushion over the Brexit period would be undertaken only on a short  ...  view the full minutes text for item 1.

 

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