| Item | Description | Resolution |
|---|---|---|
| PART 1 - PUBLIC | ||
| MATTERS FOR RECOMMENDATION TO THE COUNCIL | ||
| CB 06/101 |
Review of the Council's Treasury Management Strategy Statement and Investment Strategy for 2006/07 |
The report of the Director of Finance referred to concern expressed by Members at the meeting of the Finance and Property Advisory Board on 12 July 2006 in relation to the adverse effect on the revenue budget of the performance of the externally managed funds. The Board had requested that a full report updating the position be presented to the Cabinet and details were given of the outcome of a review undertaken with the Council's independent Treasury Advisers to determine whether a change in investment strategy and external fund manager was required. The report identified a number of changes that would enhance the combined strategy for 2006/07 and addressed the issue of poor returns achieved by the Council's external fund manager during the first quarter of the financial year. Members supported action taken by the Director of Finance to sanction the withdrawal of some funds from the external fund manager for investment by the in-house team. For the future a gradualist approach based on a mix of internal and external fund management was commended as a means of providing the greatest incentive for the external fund manager to improve returns. It was suggested that such an approach be adopted and kept under constant review via the Finance and Property Advisory Board to which arrangements had been made for the fund manager to make a presentation on 4 October 2006. RECOMMENDED: That (1) the amendments to the Treasury Management Strategy Statement and Annual Investment Strategy and Appendices outlined at paragraph 1.2.3 of the report be approved; (2) if and when it is considered appropriate, up to 50% of funds available for more than one year be withdrawn from the external fund manager and managed internally, subject to a further report to a future meeting of the Cabinet proposing the governance arrangements for this increased flexibility; (3) the fund manager's performance be monitored in accordance with the parameters set out in the report and action taken if necessary; and (4) in the event that a new external fund manager is to be appointed, the existing Treasury Adviser be appointed as consultant to that process. *Referred to Council |