Agenda item

The Chairman began by seeking clarification from the statutory officers about the requirements needed to scrutinise this document, in terms of skills, knowledge and competence. He referred to section 1.4 of the strategy document which set out the expectation that scrutiny committee members would be adequately trained in treasury management.

The Monitoring Officer (MO) advised that the Chartered Institute of Public Finance & Accountancy (CIPFA) Treasury Management Code required members undertaking scrutiny of the strategy to have an adequate understanding of treasury management. In her view, this meant that specific treasury management training should be provided to members of Overview & Scrutiny Committee and Governance, Audit & Risk Committee (GRAC). She said that she understood that this training was being arranged through the Council’s treasury management advisers in the new year.

The DFR said that the committee was required to review the treasury management outturn report and members would receive the required training prior to that. Training could be provided for all members on treasury management in the new year.

The Chairman sought clarification regarding whether a formal record of members who had attended training was required. The DFR said she didn’t think it needed to be a formal record as such but attendance could be logged. The Chairman referred to page 45 of the agenda and the reference to a formal record of the treasury management / finance training received by members. The DFR said that the level of training required related to the complexity of the treasury management strategy and in her view, NNDC’s strategy was relatively straightforward with the majority of investments being held in either the money market fund or externally as managed investments, with no borrowing at the current time.

The Chairman asked members of the committee whether they felt knowledgeable enough to continue with scrutiny of this item. He said that it was linked closely to the Budget and MTFS and it may be necessary to make changes to the treasury management strategy to accommodate the future financing needs of the Council.

Cllr Housden said that he felt training was essential. It was likely that treasury management was a matter that would come up time and time again, given the severity of the Council’s financial situation that had been highlighted in the draft budget report.

Cllr Holliday said that she would like training. It was a complex subject and the terminology was difficult to understand.

Cllr L Vickers referred to paragraph 1.4 on page 8 of the report and said it clearly stated that members must be trained in treasury management, especially members responsible for scrutiny.

Cllr J Toye asked how much influence members could have on the strategy and the impact on the ‘bottom line’. The CE replied that the Council had a simple risks around financial exposure. It was debt free with reserves at approximately £22m and there were externally appointed advisers which managed the portfolio on the Council’s behalf. There were no investments in commercial retail or any property where there might be significant risks. He acknowledged that the committee had a statutory duty to scrutinise the Council’s investments but said that any training needed to be proportionate.

The Chairman asked about the options for the future, particularly invest to save opportunities. He gave the example of the current homelessness issue and asked whether some of the money currently in reserves could be used to invest in housing. The DFR replied that this was not an option as to finance any capital expenditure it had to be funded from capital receipts usually through the sale of assets or via grant funding. The Council could not use the cash that was currently invested. In response to a further question regarding the possibilities of investing in property, the DFR replied that this would have to be funded through borrowing as the Council did not have a high level of capital receipts. She added that it was not a good time to borrow as interest rates were very high.

The Chairman said that it was a lengthy report with a lot of detail included and he assumed it was there because the DFR felt members needed to know it. The DFR said that the report layout was in line with the CIPFA standard template and although it may look complex, she was confident that the current treasury management strategy was straightforward and sustainable. The Chairman sought clarification regarding the timing of the training and whether it was possible to defer this item to the next meeting and have the training in advance of that. The DFR confirmed that this could occur and it may be helpful to push the next meeting back by a week to allow additional time to arrange training.

Cllr Penfold said that he did not feel that it was good practice to have a report on the agenda with clear recommendations and then for members to potentially defer it because they decided they wanted more training. He felt this should have been requested earlier. He said that he was happy to proceed with scrutiny of the report. The Chairman said that Cllr Penfold raised a good point. At the Overview & Scrutiny pre-agenda meeting there were no reports available. If they had been provided in good time then this issue could have been identified at that point.

The Democratic Services Manager (DSM) confirmed that treasury management training was last provided to members in early 2020 just prior to the start of the pandemic. It had not taken place since then.

The Chairman asked members to indicate if they were happy to proceed with consideration of the report. One member voted in favour. The Chairman said that as members had expressed concern that they hadn’t received the necessary training to competently scrutinise the strategy and explore options to closing the future widening budget gaps , he proposed that it was deferred. This was seconded by Cllr Housden.

RESOLVED

To defer this item until the next meeting to allow the required training to be given.