Issue - meetings

Report of the Chief Finance Officer is circulated

Councillor John Brady, Cabinet Member for Finance, Performance and Risk, presented a report which presented the revised Treasury Management Strategy for 2011-12 to reflect the need to borrow for HRA (Housing Revenue Account) self-financing due to the statutory change under the Localism Bill and includes:

a)    the revised Prudential and Treasury Indicators (PrIs and TrIs) for the next three years; and

b)    the revised Annual Investment Strategy for 2011-12.

For clarity, and the benefit of the members of the public who were present, Councillor John Thomson (Deputy Leader and Cabinet Member for Adult Care, Communities and Housing) explained the background to the proposal to increase the Council’s borrowing on this basis.  Under previous legislation, Councils were required to pay a portion of their income from Housing rents to central government for redistribution as part of the Housing subsidy scheme.  However, under the Localism Act 2011, Councils could buy out of this scheme, and retain all rental income, along with the responsibility to support, maintain and develop their own housing stock.  This self-financing would require a payment from the Council to the Department for Communities and Local Government (DCLG) of £119.356 million in March 2012, increasing the Council’s level of indebtedness by just over 50%.  This option would leave the Council’s HRA around £3 million better off per year.

In response to comments made regarding the proposed rent increase, it was confirmed that this figure had been set by central government, although other fees and charges were being kept at existing levels to minimise the impact on tenants.  It was noted that Housing Association rents tended to be higher than Council rents; Councillor Thomson undertook to provide details on this to the Tenants’ Panel.

In addition, the Leader undertook to investigate a submission sent to the Council’s Housing department and to write a letter to the Housing Minister setting out the impact of rent increases on Wiltshire Council tenants.

Following discussion regarding garage rents, Councillor Thomson undertook to provide information on garage tenancy rates to Councillor Jon Hubbard.

Resolved:

To recommend that the Council:

a)    adopt the revised Prudential and Treasury Indicators (Appendix A);

b)   adopt the revised Annual Investment Strategy (Appendix B);

c)    delegate to the Chief Finance Officer the authority to vary the amount of borrowing and other long term liabilities within both the Treasury Indicators for the Authorised Limit and the Operational Boundary;

d)   authorise the Chief Finance Officer to agree the restructuring of existing long-term loans where savings are achievable or to enhance the long term portfolio;

e)    agree that short term cash surpluses and deficits continue to be managed through temporary loans and deposits; and

f)     agree that any long term surplus cash balances not required to cover borrowing are placed in authorised money-market funds, particularly where this is more cost effective than short term deposits and delegate to the Chief Finance Officer the authority to select such funds.

Reason for Decision

To enable the Council to agree a revised Treasury Management Strategy for  ...  view the full minutes text for item 34