TREASURY POLICY STATEMENT 2005/06

CONTENTS

Section

1.0 Introduction2.0 Treasury Management Operation3.0 Treasury Management Strategy4.0 Approved Methods and Sources of Raising Capital Finance5.0 Prudential Indicators6.0 Annual Investment Strategy7.0 Delegated Powers8.0 Review & Reporting ArrangementsSchedule A Debt Maturity ProfileSchedule B Staff Involved in Treasury ManagementSchedule C Authorised Signature List

1.0 INTRODUCTION

1.1 The Council has customarily considered an annual Treasury Strategy Statement under the requirement of the CIPFA Code of Practice on Treasury Management. The 2003 Prudential Code for Capital Finance in local authorities has introduced new requirements for the manner in which capital spending plans are to be considered and approved, and in conjunction with this, the development of an integrated treasury management strategy.

1.2 The Prudential Code requires the Council to set a number of Prudential Indicators, certain of which replace the borrowing/variable interest limits previously determined as part of the strategy statement, whilst also extending the period covered from one to three years. This report incorporates the indicators determining the Council’s treasury management strategy for the next 3 financial years.

2.0 TREASURY MANAGEMENT OPERATION

2.1 Treasury Management is -

“the management of the local authority’s cash flows, its banking, money market and capital market transactions; the management of the associated risks, and the pursuit of the optimum performance or return consistent with those risks”.

2.2 The CIPFA’s Code of Practice for Treasury Management, which the Authority has adopted, requires that authorities adopt the following clauses:

The Authority will maintain a Treasury Management Policy Statement, stating the policies and objectives of its treasury management activities. The Authority will also maintain suitable Treasury Management Practices (TMPs) setting out the manner in which policies and objectives will be achieved and how it will manage and control those activities.

1

The Authority will report on its treasury management policies, practices and activities including an Annual Strategy in advance of the year and an annual report after its close.

2.3 The approved activities of the Treasury Management operation are as follows:

(a) Cash Flow (daily balances and longer term forecasting)

(b) Investing surplus funds in accordance with the Welsh Assembly Government (WAG) Investment Guidance (March 2004)

(c) Borrowing to finance cash deficits

(d) Funding of capital payments through borrowing, capital receipts or grants

(e) Management of debt (including rescheduling and monitoring an even maturity profile)

(f) Interest rate exposure management

(g) Dealing procedures with brokers, bank and Public Works Loans Board

(h) Use of external management for temporary investment of funds

2.4 The Authority regards the successful identification, monitoring and control of risk to be the prime criteria by which the effectiveness of its treasury management activities will be measured. The analysis and reporting of treasury management activities will focus on their risk implications for the organisation. The Authority acknowledges that effective treasury management will provide support towards the achievement of its business and service objectives and is committed to the principles of achieving best value in treasury management. Suitable performance measurement techniques will be employed within the context of effective risk management.

2.5 The Authority’s current portfolio position as at 1st February 2005 is:

Principal Ave. rate

£m %Fixed rate funding PWLB 68.74

Market 4.00 72.74 6.80

Variable rate funding PWLB 0.00Market 19.25 19.25 2.21

Other long term liabilities 0.00

TOTAL DEBT 91.99 5.84

TOTAL INVESTMENTS 5.40

2

Investments held are due to the temporary cash flow position of the Authority and are of a very short term nature.

2.6 The borrowing requirement for the next 3 years is:

2004/05 2005/06 2006/07 2007/08

£'000 £'000 £'000 £'00014,467 New borrowing 4,000 4,000 4,000

0 Alternative financing arrangements 0 0 0

533 Replacement borrowing 9,368 14,045 871

15,000 TOTAL 13,368 18,045 4,871

3.0 TREASURY MANAGEMENT STRATEGY

3.1 Objectives

The major objectives to be followed in 2005/06 are:-

(a) Borrowing

To minimise the revenue costs of debt

To manage the Council’s debt maturity profile i.e. to leave no one future year with a high level of repayments that could cause problems in re-borrowing (the current debt maturity profile is shown in Schedule A).

To effect funding in any one year at the cheapest cost commensurate with future risk.

To forecast average future interest rates and borrow accordingly

To monitor and review the level of variable interest rate loans in order to take greater advantage of interest rate movements.

To reschedule debt in order to take advantage of potential savings as interest rates change.

(b) Investment

To achieve a level of return greater than would be secured by internal investment

To maintain capital security

To maintain policy flexibility.

3.2 Forecasts for 2005/06

3

Prospects for Interest Rates

The Council has appointed Butlers as the Council’s Treasury Management Consultant and part of their service is to assist the Council with formulating a view on interest rates.

The base rate is projected to remain constant at 4.75% in the early part of 2005 and fall back to 4.5% by the end of 2005.

Mid and long term PWLB rates are not projected to deviate significantly in 2005 from the current rates of 4.7% for 5 years and 4.65% for 25 years.

Shorter-term rates – Base rate increased from 4% to 4.75% during 2004. The inflation target for the Monetary Policy Committee (MPC) in 2004 was plus or minus 1% and around 2% on CPI (consumer prices index). CPI has been running at 1.2% – 1.6% throughout 2004 and is forecast to rise steadily in 2005, reaching 2% in 2006. Wage inflation and producer price inflation are rising at around 4%. However, oil prices have been very volatile recently reaching a high of $50 per barrel. This volatility could affect the forecasts for inflation. The upside is that the potential increase for the base rate is limited by the heightened sensitivity of consumers to interest rate rises due to the huge increase in personal borrowing in recent years.

Longer-term interest rates – PWLB rates were at low levels during the first part of 2004 rising to around 4.65% at the year end. This rate is expected to continue to rise in the early part of 2005 and then fall back to 4.6% towards the year end.

Capital Borrowings and the Borrowing Portfolio Strategy

Based upon the prospects for interest rates outlined above, there are a number of strategy options available. The anticipation is that short-term variable rates will continue to be cheaper than long-term PWLB fixed rate borrowing during 2005/06. Short term variable rates are expected to rise in line with increases in the base rate. Long term rates are also expected to rise. These expectations provide a variety of options:

that short term variable rates will be good value compared to long term rates, and are likely to remain so for potentially at least the next couple of years. Best value will therefore be achieved by borrowing short term at variable rates in order to minimise borrowing costs in the short term or to make short term savings required in order to meet budgetary constraints.

that the risks intrinsic in the shorter term variable rates are such, when compared to historically relatively low long term fixed funding, which may be achievable in 2005/06, that the Council will maintain a stable, longer term portfolio by drawing longer term fixed rate funding at a marginally higher rate than short term rates.

Against this background caution will be adopted with the 2005/06 treasury operations. The Deputy Chief Executive and Director of Corporate Services

4

will monitor the interest rate market and adopt a pragmatic approach to any changing circumstances, reporting any decisions to Cabinet as and when necessary.

Sensitivity of the forecast - The main sensitivities of the forecast are likely to be the two scenarios below. The Council officers, in conjunction with the treasury advisers, will continually monitor both the prevailing interest rates and the market forecasts, adopting the following responses to a change of sentiment:

if it was felt that there was a significant risk of a sharp rise in long and short term rates, perhaps arising from a greater than expected increase in world economic activity, then the portfolio position will be re-appraised with the likely action that fixed rate funding will be drawn down whilst interest rates are still relatively cheap.

if it was felt that there was a significant risk of a sharp fall in long and short term rates, due to e.g. growth rates remaining low or weakening, then long term borrowings will be postponed, and any rescheduling from fixed rate funding into variable or short rate funding will be exercised.

The Council has assumed borrowing rates of between 4.6% and 5% in the Treasury Management Strategy for 2005/06.

The PWLB rates range from 4.6% for one year to 4.75% for 10 – 20 years. (PWLB Interest Rate Notice, dated 1st February 2005).

3.3 Strategy

(a) Capital Finance

To achieve the optimum funding structure for the Capital Programme, maximising the use of capital grants, prudently using capital receipts and utilising borrowing and other financing options.

(b) Borrowing

To maintain a flexible approach and take advantage of the low interest rates which currently apply to long, medium and short- term borrowing.

(c) Temporary InvestmentsTo minimise the use of temporary investments except when required to maintain flexibility, and where borrowing is made in advance of requirements.

(d) Debt Rescheduling

5

To review the possibility of debt rescheduling as and when the opportunity arises, but not to proceed unless the appropriate discounted cash flow calculations are favourable.

(e) Treasury Management Consultant

The Council has a contract with the treasury management consultant, Butlers, whose remit is to work with the Authority through the coming year and assist in the delivery of the objectives of the Treasury Management Strategy.

4.0 APPROVED METHODS AND SOURCES OF RAISING CAPITAL FINANCE

4.1 The following list specifies which sources of finance available:

Fixed VariableBorrowing InstrumentsPWLB X XMarket Long Term X XMarket Temporary X XEuropean Investment Bank X XLocal Bonds XOverdraft XNegotiable Bonds X XStock Issues X X

Other Sources of FinanceCapital ReceiptsLeasingGrantsLottery MoniesJoint ArrangementsPFI

4.2 The Council has no policy to restrict the type of borrowing instruments required and all the above are available to the Deputy Chief Executive and Director Corporate Services when he considers them appropriate.

4.3 However, it is anticipated that in practice borrowing will be confined to -

(a) PWLB(b) Market Temporary(c) Market Long Term(d) Overdraft(e) Leasing

5.0 PRUDENTIAL INDICATORS

6

The following Prudential Indicators are required to be set and approved by Council in accordance with the Prudential Code. There are no future year estimates for Housing Revenue Account as the housing stock was transferred to Valleys to Coast Housing Association in September 2003.

5.1 Prudential Indicators for Prudence

No. Prudential indicators For Prudence 2003/04 2004/05 2005/06 2006/07 2007/08Actual Proj Est Est Est

1 Estimates of Capital Expenditure £'000 £'000 £'000 £'000 £'000 Non – HRA 28,649 31,853 18,214 15,205 11,570 HRA (applies only to housing authorities) 2,112 0 0 0 0 TOTAL 30,761 31,853 18,214 15,205 11,570

2 Capital Financing Requirement (as at 31 March) £'000 £'000 £'000 £'000 £'000 Non – HRA 116,707 121,173 123,896 126,378 128,761 HRA (applies only to housing authorities) 0 0 0 0 0 TOTAL 116,707 121,173 123,896 126,378 128,761

3 External Borrowing £'000 £'000 £'000 £'000 £'000Total Long Term Borrowing 91,360 98,827 101,827 104,827 107,827

The actual capital expenditure that was incurred in 2003/04 is split between Council Fund and HRA. The estimates of capital expenditure to be incurred for the current and future years are recommended in accordance with the approved Capital Programme for 2005/06.

The Capital Financing Requirement measures the Authority’s underlying need to borrow for capital purposes. In accordance with best practice there is no association between individual loans and particular types of expenditure. The Authority has an integrated Treasury Management Strategy and has adopted the CIPFA Code of Practice for Treasury Management in Public Services. External Borrowing arises as a result of both capital and revenue expenditure. Therefore, the Capital Financing Requirement and actual external borrowing can be very different.

One of the Prudential Indicators for Prudence, called the Net Borrowing and Capital Financing Requirement requires that:

“In order to ensure that over the medium term net borrowing will only be for a capital purpose, the local authority should ensure that net external borrowing does not, except in the short term, exceed the total capital financing requirement in the preceding year plus the estimates of any additional capital financing requirement for the current and next two financial years.”

The Deputy Chief Executive and Director of Financial Services reports that the Authority had no difficulty meeting this requirement in 2003/04 and does not envisage any difficulties in the current and future years. This view takes into

7

account current commitments, existing plans and the proposals for next year’s budget.

5.2 Prudential Indicators for Affordability

No. Prudential Indicators for Affordability 2003/04 2004/05 2005/06 2006/07 2007/08

Act Proj Est Est EstRatio of Financing Costs to Net Revenue Stream

4 Council Fund 5.42% 5.50% 5.60% 5.60% 5.60%5 Housing Revenue Account 15.53% 0 0 0 0

Incremental Impact of Capital Investment Decisions on Council Tax

6 Increase in Band D Council Tax as per Capital Programme

- £0.00 £0.00 £0.00 £0.00

7 Increase in Band D Council Tax Incl Rejected Proposals

- £0.00 £0.00 £0.00 £0.00

The estimates of financing costs include current commitments and the proposals in the Budget Report. Financing Costs include external interest and the Minimum Revenue Provision charged to the Consolidated Revenue Account. The Net Revenue Stream is the Budget Requirement for the Council Fund and the total of rents and subsidy for Housing Revenue Account.

The estimate of the Incremental Impact of Capital Investment Decisions on Council Tax (No. 6) is the future effect on Council Tax of the approved Capital Programme 2005/06. As a comparison indicator No. 7 would show the effect on Council Tax if additional unsupported borrowing had been undertaken to carry out all of the high priority schemes identified in the Capital Programme Appraisal.

5.3 Prudential Indicators for Treasury Management

No. Prudential Indicators For Treasury Management 2003/04£'m

2004/05 £'m

2005/06 £'m

2006/07 £'m

2007/08 £'m

8 Authorised limit for external debt - Borrowing 180 123 126 126 126Other long term liabilities 0 0 3 3 3TOTAL 180 123 129 129 129

9 Operational boundary - Borrowing 147 102 106 110 114Other long term liabilities 0 2 2 2TOTAL 147 102 108 112 116

10 Upper limit for fixed interest rate exposure Net principal re fixed rate borrowing / investments 141 102 106 110 114

11 Upper limit for variable rate exposureNet principal re variable rate borrowing / investments 35 44 45 45 45

12 Upper limit for total principal sums invested for over 364 days (per maturity date)

0 0 0 0 0

Bridgend County Borough Council has adopted the CIPFA Code of Practice for Treasury Management in Public Services.

8

The Authorised Limit for External Debt and Operational Boundary separately identifies borrowing from other Long Term Liabilities such as finance leases. The limits are consistent with the Authority’s current commitments, existing plans, approved revenue and capital budgets, and approved Treasury Management Policy. They also have regard to risk management strategies, estimates of capital expenditure, capital financing requirements and cash flow projections.

The Operational Boundary is based on the estimate of the most likely, prudent but not worst case scenario and represents a key management tool for in year monitoring. The Authorised Limit includes additional headroom to allow for unusual cash movements.

It should be noted that actual external debt is not directly comparable to the Authorised Limit as actual external debt reflects the position at one point in time.

The Cabinet is asked to recommend these limits and to delegate authority to Deputy Chief Executive and Director of Corporate Services to effect movement between the separate agreed annual limits for borrowing and other long term liabilities in accordance with option appraisal and value for money. Any such changes will be reported to Council.

The Cabinet is asked to note that the Authorised Limit for 2005/06 will be the statutory limit determined under Section 3(1) of the Local Government Act 2003 :

Upper limits for fixed interest rate exposure for principal sums have been set at £106m for 2005/06, £110m for 2006/07 and £114m for 2007/08.

Upper limits for variable interest rate exposure or principal sums have been set at £45m for 2005/06,2006/07 and 2007/08 .

The Deputy Chief Executive and Director of Corporate Services will manage interest rate exposures between these limits in 2005/06.

There are no proposals for the Council to invest sums for periods longer than 364 days.

The amount of projected borrowing that is fixed rate, maturing in each period as a percentage of total projected fixed rate borrowing is:

No Maturity structure of new fixed rate borrowing during 2005/06

upper limit

lower limit

9

13 Under 12 months 20% 0% 12 months and within 24 months 20% 0% 24 months and within 5 years 50% 0% 5 years and within 10 years 60% 0% 10 years and above 80% 40%

6 ANNUAL INVESTMENT STRATEGY

6.1 This Council has regard to the Welsh Assembly Government’s Guidance on Local Government Investments (currently in draft form) and CIPFA’s Treasury Management in Public Services: Code of Practice and Cross Sectoral Guidance Notes (“CIPFA TM Code”).

6.2 This Annual Investment Strategy states which investments the Council may use for the prudent management of its treasury balances during the financial year under the heads of Specified Investments and Non-Specified Investments. These are listed in Section 6.13

6.3 This Strategy also sets out:

The procedures for determining the use of each asset class (advantages and associated risk), particularly if the investment falls under the category of “non-specified investments”;

The maximum periods for which funds may be prudently committed in each asset class;

The £ limit to be invested in each asset class; The investment instruments to be used by the Council’s in-house officers;

and, if non-specified investments are to be used in-house, whether prior professional advice is to be sought from the Council’s treasury advisors;

The minimum amount to be held in short-term investments (i.e. one which the Council may require to be repaid or redeemed within 12 months of making the Investment).

Investment Objectives

6.4 All investments will be in sterling. The general policy objective for this Council is the prudent investment of its treasury balances*. The Council’s investment priorities are:

(a) the security of capital and (b) liquidity of its investments.

The council will aim to achieve the optimum return on its investments commensurate with the proper levels of security and liquidity.

* this includes monies borrowed for the purpose of expenditure in the reasonably near future (i.e. borrowed 12-18 months in advance of need).

10

6.5 The Welsh Assembly Government maintains that the borrowing of monies purely to invest or on-lend and make a return is unlawful and this Council will not engage in such activity.

Security of Capital : The use of Credit Ratings

6.6 This Council relies on credit ratings published by Fitch Ratings, Moody’s Investors Service or Standard & Poor’s to establish the credit quality of counterparties (issuers and issues) and investment schemes. The Council has also determined the minimum long-term and short-term and other credit ratings it deems to be “high” for each category of investment (See Section 6.14).

Monitoring of credit ratings:

All credit ratings will be monitored periodically. The Council is alerted to changes by Butlers (Treasury Management Consultant).

If a counterparty’s or investment scheme’s rating is downgraded with the result that it no longer meets the Council’s minimum criteria, the further use of that counterparty/investment scheme as a new investment will be withdrawn immediately.

If a counterparty is upgraded so that it fulfils the Council’s criteria, it will be included in the Counterpart List.

Investment balances/Liquidity of investments

6.7 Based on its cash flow forecasts, the Council anticipates its fund balances in 2005/06 to range between nil and £20m.

6.8 The minimum amount of its overall investments that the Council will hold in short-term investments is nil.

6.9 Giving due consideration to the Council’s level of balances over the next 3 years, the need for liquidity, its spending commitments and provision for contingencies, the Council has determined that none of its overall fund balances can be prudently committed to longer term investments (i.e. those with a maturity exceeding a year).

Investments defined as capital expenditure

6.10 The acquisition of share capital or loan capital in any body corporate is defined as capital expenditure under Section 16(2) of the Local Government Act 2003. Such investments will have to be funded out of capital or revenue resources and will be classified as ‘non-specified investments’.

6.11 A loan or grant by the Council to another body for capital expenditure by that body is also deemed by regulation to be capital expenditure by this Council. It is therefore important for the Council to clearly identify if the loan has been made for policy reasons (e.g to the registered social landlord for the

11

construction/improvement of dwellings) or if it is an investment for treasury management purposes. The latter will be governed by the framework set by the Council for ‘specified’ and ‘non-specified’ investments.

Provisions for Credit-related losses

6.12 If any of the Council’s investments appeared at risk of loss due to default (i.e. this is a credit-related loss, and not one resulting from a fall in price due to movements in interest rates) the Council will make revenue provision of an appropriate amount.

Investment Strategy to be followed in-house

6.13 Investment is restricted to Specified Investments (those which offer high security and liquidity, are in sterling and have a maturity of less than 1 year) as follows:

U.K. Local Authorities, parish councils and community councils Central Government (NILO) Money Market Funds Banks Building Societies

Non-specified investments will not be used.

6.14 This policy further restricts the above by limiting the bodies approved in 6.13 to those with “high credit rating”. “High” is defined as:

AAA rating for Money Market Funds

Long term rating of AA- and/or short term rating of F1/A1/P1 for Banks and Building Societies

6.15 All other investments are defined as Non-Specified Investments and will not be entered into without prior advice being sought from the Authority’s Treasury Management Consultant (Butlers).

6.16 The Council does not employ external fund managers to manage the day to day Treasury Management activities.

6.17 The money market yield curve is currently anticipating rising base rates in 2005/06. Investment maturities will generally be kept short (1-3 months), with a view to enabling returns to be compounded more frequently.

End of year Investment Report

6.18 At the end of the financial year, the Council will prepare a report on its investment activity as part of its Annual Treasury Report.

7.0 DELEGATED POWERS

12

7.1 Cabinet/Council

The setting of borrowing limits and Prudential Indicators requires the resolution of full Council.

7.2 Deputy Chief Executive and Director of Corporate Services

The Deputy Chief Executive and Director of Corporate Services’ delegated powers in respect of Investments, Borrowing and Trust Funds are contained in the Council’s Constitution under the Financial Procedure Rules which are shown in Schedule C.

In practice most of the work is carried out by Officers of the Finance Division, and a summary of the roles of the staff concerned is contained in Schedule B.

8.0 REVIEW AND REPORTING ARRANGEMENTS

8.1 An annual report will be made by the 30th September in the following financial year. A monitoring report on treasury management activities will be submitted to Cabinet 6 monthly.

13

14

SCHEDULE B

ROLES OF FINANCE DEPARTMENT STAFF RELATING TO TREASURYMANAGEMENT

DEPUTY CHIEF EXECUTIVE AND DIRECTOR OF CORPORATE SERVICES

1. Ensure policy documents exist and are adhered to, and that they are regularly reviewed.

2. Ensure that a review of the Treasury Management function and its performance takes place at least twice a year.

3. Report to Members, Cabinet and Council on performance and activities of Treasury Management in accordance with the Treasury Management Policy Statement.

4. Ensure that there is a clear written statement of the responsibilities delegated to each post and arrangements for absence cover.

ASSISTANT DIRECTOR OF CORPORATE SERVICES (FINANCE)

1. Deputise for the Deputy Chief Executive and Director of Corporate Services in the performance of Treasury Management as required.

15

CHIEF ACCOUNTANT

1. Prepare and review the Treasury Policy Statement, assure it is complied with, and that this statement complies with the law.

2. Ensure that Treasury Management Practices exist.

3. Review performance of the Treasury Management function at least twice a year and prepare monitoring reports and annual reports for the Deputy Chief Executive and Director of Corporate Services/Cabinet/Council as required.

4. Ensure all persons engaged in Treasury Management activities receive appropriate training.

5. Ensure the organisation of the Treasury Management function is adequate to meet current requirements.

6. Ensure that there is adequate internal checking and division of duties.

7. Ensure that all treasury staff are aware and given access to the Non-Investment Products Code (NIPS).

8. Advise the Deputy Chief Executive and Director of Corporate Services on Treasury matters.

BUSINESS MANAGER (FINANCIAL CONTROL)

16

Absence Cover: Senior Accountant (Corporate Services)

1. Manage the overall Treasury function.

2. Implement the Treasury Policy Statement.

3. Prepare and implement the Treasury Management Practices.

4. Ensure that the systems and procedures laid down in the Treasury Management Practices are complied with, and that prescribed limits are not breached.

5. Ensure appropriate division of duties in this section.

6. Ensure credit worthiness of investment counter-parties.

7. Assess and appoint brokers, and monitor the performance of brokers employed.

8. Review Treasury Management Practices i.e. borrowing limits, risk spreading, data recording at least annually.

9. Receive reports from Loans Officer on a monthly basis on

- all loans transactions- cashflow actuals and projections- level of debt/investment

10. Produce performance reports for Chief Accountant.

11. Assist in the preparation of the Treasury Policy Statement.

12. Prepare an annual report on the Treasury Management function by 30th September of the succeeding financial year.

17

LOANS OFFICER

Absence Cover: Senior Accountant (Corporate Services)

1. Prepare Cash Flow projections

2. Make daily decisions on funding, lending, acceptability of treasury instruments, and consider legality of proposed action.

3. Dealing and initial record of deal

4. Transmission procedures

5. Comply with the Non-Investment Products Code (NIPS)

6. Provide the Business Manager (Financial Control) with a monthly report on:

- transactions made- cash flow actuals and projects- level of debt/investment

SENIOR ACCOUNTANT (CORPORATE SERVICES)

1. Provide absence cover for Business Manager (Financial Control)

2. Provide absence cover for Loans Officer

NB. The Senior Accountant should not deputise for both Business Manager and Loans Officer at the same time.

As a further internal check the authorisation and approval of the transmission of transactions to the bank will be performed by Business Managers, Group Accountants and Senior Accountants outside the Accountancy Loans Sub Section.

18

SCHEDULE C

AUTHORISED SIGNATORY LIST

....................................................................... L. JamesDeputy Chief Executive and Director of Corporate Services

....................................................................... A. PhillipsAssistant Director Finance

....................................................................... J . SmithChief Accountant

19

SCHEDULE C

INVESTMENTS, BORROWINGS AND TRUST FUNDS

17.1 This organisation adopts the key recommendations of CIPFA’s Treasury Management in the Public Services: Code of Practice (the Code), as described in section 4 of that Code.

17.2 Accordingly, the organisation will create and maintain, as the cornerstone for effective treasury management:

A treasury management policy statement, stating the policies and objectives of its treasury management activities

Suitable Treasury Management Practices (TMP’s), setting out the manner in which the organisation will seek to achieve those policies and objectives, and prescribing how it will manage and control those activities”.

17.3 The content of the policy statement and TMP’s will follow the recommendations contained in sections 6 and 7 of the Code, subject only to amendment where necessary to reflect the particular circumstances of this organisation. Such amendments will not result in the organisation materially deviating from the Code’s key recommendations.

This Council will receive reports on its treasury management policies, practices and activities, including as a minimum, an annual strategy and plan in advance of the year, and an annual report after its close, in the form prescribed in its TMP’s.

This Council delegates responsibility for the implementation and monitoring of its treasury management policies and practices to the Cabinet, and for the execution and administration of treasury management decisions to the Chief Finance Officer, who will act in accordance with the organisation’s policy statement and TMPs.

17.4 All investments of money under its control shall be made in the name of the Council.

17.5 All investments and borrowing transactions shall be undertaken in accordance with the Council’s Treasury Management Policy Document.

17.6 The Chief Finance Officer shall report six monthly to the Cabinet summarising his loan and investment activity and indicating their compliance with any statutory or Council approved guidelines.

20

17.7 The Chief Financial Officer, or an agent nominated by the Chief Finance Officer, will be the Council’s Registrar of loan instruments and shall maintain records of all borrowing of money by the Council.

17.8 The Chief Financial Officer will have a duty to ensure a proper, efficient and effective mix of borrowing and investments.

21