Decision Maker: Andy Brown (Corporate Director Resources & Deputy Chief Executive)
Decision status: Recommendations Approved
Is Key decision?: No
Is subject to call in?: No
To approve the increase of the Treasury
Management Counterparty Monetary Limits from £15m to
£30m
This decision would in other circumstances be
taken by Council. However, in circumstances where the Council is
unable to meet to expedite its functions in a timely manner during
the COVID-19 pandemic, this decision is being taken in accordance
with the power referred to in paragraph 1 above in consultation
with the Chief Executive Officers and other statutory officers of
Wiltshire Council. This decision will be reported to the next
meeting of the Council.
The Treasury Management ‘Counterparty monetary limits’
were approved by Council on 25 February 2020 as part of the
Treasury Management Strategy 2020/2021. These values were based on
normal business activity expected for the Council over that coming
financial year. These limits were set at £15m per
counterparty, those being financial institutions where the Councils
deposits surplus cash, and were UK and Overseas banks with a long
term credit rating of at least AA, multilateral development banks,
Local Authorities and other Public Bodies, and Money Market
Funds.
Following the pandemic outbreak a review of the cashflow position
was instructed by the Section 151 Officer, as a lack of cashflow
over the coming weeks was an initial concern. However, MHCLG has
provided funding to support the Covid-19 Business Grants scheme.
This funding will be paid to all Local Authorities responsible for
administering the scheme on 1 April 2020. The value of this funding
for Wiltshire Council is £106m with payments made to
businesses likely to start to be processed the week beginning 6
April 2020.
Holding this value of cash is in excess of any normal business cash
holdings values the Council would expect to hold and would breach
the existing approved limits. Although the Treasury function is
delegated to the Section 151 Officer, any breaches to the approved
strategy would need to be reported, specifically if Council have
not amended the Strategy in time.
As a result, it is necessary to approve the increase of the
‘Counterparty monetary limits’ from £15m to
£30m to ensure these monies are invested in financial
institutions with lower risk to the capital value. This will still
be reported to Council as part of overall reporting on Treasury
Management activity for the financial year.
I confirm that in making this decision I have considered the
following in line with Wiltshire Council’s
Constitution:
Key decision requirements: yes
Views of relevant cabinet member(s), committee chairman, area
board(s): yes
Consideration of the area boards and delegated decision checklist
for officers on the issue of when and how to involve local
councillors and area boards in decisions about local services: not
applicable
Implication of any council policy, initiative, strategy or
procedure: yes
Consultation in accordance with requirements and expectations of
consultation with the public: not applicable
Range of options available:yes
Staffing, financial and legal implications: yes
Risk assessment: yes
Involvement of statutory officers and/or directors: yes
Regional or national guidance from other bodies: yes
The council’s constitution: yes
This contract is suitable for execution under the e-signature
process: na
An option that would significantly increase
the level of counterparty risk, by lowering the creditworthiness
rating of financial institutions we could use has been ruled out.
Therefore, there are no real alternative options open to the
Council in this scenario. The limits were originally set to deal
with highest expected cashflow position the Council could face
during a normal operating year, the payment to be received is far
in excess of that which could have been predicted, so we will
breach the current limits.
Conflict of Interest: Not applicable
Background: Pursuant to paragraph 4 of Part 3 Section D, the Directors of Wiltshire Council are empowered to take all necessary decisions in cases of emergency. This decision is being taken by Andy Brown using these powers in circumstances where the Directors concerned believe that there is a risk of damage to property, a threat to the health or wellbeing of an individual and/or that the interests of the Council may be compromised if this decision is not otherwise taken.
Contact: Andy Brown, Corporate Director Resources & Deputy Chief Executive Email: andy.brown@wiltshire.gov.uk.
Publication date: 02/06/2020
Date of decision: 01/04/2020
Accompanying Documents: