Treasury management is the management of the council’s cash flows, its banking, money market and capital market transactions; the effective control of the risks associated with those activities and the pursuit of optimum performance consistent with those risks.
The council maintains and operates a treasury management policy comprising the principles and practices to which the activity will comply. Alongside this policy, the council must have regard to Department for Communities and Local Government (DCLG) guidance, under section 15(1)(a) of the Local Government Act 2003. This guidance provides for each authority to determine its own controls within a given framework.
The prime objective of the council’s investment strategy is to maintain capital security whilst ensuring that there is the necessary liquidity to carry out its business. Within these constraints, the strategy aims to maximise returns.
The borrowing strategy aims to minimise the revenue cost of debt whilst securing the council from revenue pressures in the event of interest rate volatility.
One revenue consequence of borrowing is the statutory requirement to set aside an amount for repayment of debt, known as Minimum Revenue Provision (MRP). Regulations require the authority to determine annually a principle by which MRP will be determined.
The treasury management strategy aims to protect the council from market-related risks by monitoring interest rates, economic indicators, and UK and overseas government finances. A range of information sources is used to inform economic analysis and forecasts.
The report considers the strategy to be followed for investment and borrowing. It also sets out the council’s expectation for interest rates and highlights the uncertainties and risks in the forecast.
If you have any questions regarding treasury management please contact:
Hayley Featherstone, Senior Accountant
East Riding of Yorkshire Council
East Riding of Yorkshire
Tel. (01482) 394253