To receive a report of the Deputy Leader & Cabinet Member for Finance seeking agreement to proposed changes to the Treasury Strategy.
– report of the Deputy Leader and Cabinet Member for Finance and Procurement,Mr Simmondsand theCorporateDirector forFinance,AndyWood)
(1) Cabinet received a report seeking agreement to revisions to the Council’s TreasuryStrategy. TheDeputyLeader,Mr Simmonds,introducedthe report.
(2) Heconfirmedthat theCounty Council hadapproved theTreasuryManagement Strategy in February2014but,owing to thechanging natureofthe economic climate,amendments werenow desirablewhich Cabinetwere authorisedto make. Thesuggestedchangeshadbeenconsideredby thead-hocall-party group onTreasuryManagementand werein linewith the relevantcode of practice forsuch matters.
(3) Cabinetheardthatthechangeswere necessaryas aresultofdevelopments sinceFebruary,these were:
i. Thechanged attitudeofGovernmentsto ‘bailingout’ banksthathad experienced financialdifficultyhad increasedthe levelof riskborne by investors.
ii. TherequirementoftheStrategythat noonebankbeinvestedin beyond £40 million was increasingly difficult to manage owing to the limited numberofappropriatebanks thathadbeenfurtherreducedby thedown rating of RBSandNatWesttoa level thatwas notacceptableto KCC. In addition,depositratesremainedpoor atthosebankswith whichKCC couldinvest.
(4) Finally,Mr Simmondsreported thatwhere successhadbeenachievedin new assetclasses suchas‘covered bonds’ returnswere restricted bythe initial limitationson investmentset out inFebruary.
(5) HeadofFinancialS ... view the full minutes text for item 63