Public reports pack PDF 3 MB - Blaby District Council

BLABY DISTRICT COUNCIL
Meeting: Cabinet Executive
Date: 19 th November, 2012
Subject: Treasury Management Strategy – Change of
Direction
Report author
and contact
details:
Portfolio Holder:
Status: Public
1. Purpose of Report
Jim Holden
Deputy Chief Executive
Council Offices
0116 272 7502
Councillor John Hudson – Finance & Efficiencies
Portfolio Holder
1.1 To provide Members with an update on progress in connection with the
Treasury Management Strategy Change in Direction approved by Cabinet
Executive earlier this year.
2.
2.1
2.2
3.
3.1
3.2
Recommendation to Cabinet Executive
Agenda Item 10
That the decision to withdraw the entirety of the Council’s holding in the
Scottish Widows Investment Partnership liquidity investment funds is
approved; and
That the 2012/13 approved counterparty limit in relation to investments
placed with nationalised or part-nationalised UK banks be increased from
£5m to £8m.
Reason for Decision Recommended
The Scottish Widows fund is invested in short dated highly liquid financial
instruments and the rate of return on the investment has fallen significantly
in recent years. The forecast return for 2013/14 financial year indicates a
further fall in the return with little or no prospect of a reversal of this trend in
the foreseeable future. By withdrawing from the fund and managing the
investments in house the Council will be able to benefit from higher returns
from fixed term longer term deposits.
The Council’s current Investment Strategy limits the maximum amount that
can be invested with an individual counterparty to £5m. By increasing this
limit to £8m for nationalised or part-nationalised UK banks the Council will
be able to take advantage of a greater range of investment opportunities
for deposits of one year and above.
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