Agenda item

The Chair invited Bevis Ingram (Senior Adviser) to discuss the paper. In his summary, Bevis noted the following points:

-          Members were asked to provide a steer to inform the LGA response to the Prudential Code and Treasury Management consultations being run by CIPFA.

-          Prudential Code consultation is looking at changes to the code that explicitly prevent local authorities borrowing money to make commercial investments that are primarily to make a return. The review is in response to a Public Accounts Committee report on local authorities’ commercial investments.

-          The Treasury Management consultation includes the proposal to create of a dedicated committee to oversee complex treasury management arrangements. Other proposals included strengthening the skills and knowledge of relevant authority members on treasury management functions.

In the subsequent discussion the members raised the following points:

-          There were several comments on the proposed creation of treasury management committees. Members were broadly opposed to the creation of further dedicated management bodies at a local authority level. It was felt that existing structures for audit and scrutiny were suitable to provide oversight.

-          Comments were made in favour of further training for officers and members on scrutiny and audit committees to support effective treasury management.

-          Concerns were expressed over the role of CIPFA in some of the proposals in the consultations. It was felt that as a trade body CIPFA was not the appropriate body to impose some of the proposed requirements through the proposed changes to the Prudential Code.

-          Several members suggested that there was limited evidence to justify significant changes to borrowing practices. While it was recognised that a small number of councils had pushed boundaries in their investment strategies, commercial investments were an important means for authorities to raise funds and stimulate local regeneration.

-          Members also noted concerns with the complexity of reporting processes, it was felt that increasing the burden of evidence and tightening regulations could further stretch officers.

The Chair summarised the discussion, noting that members were broadly in agreement to oppose further changes to the Prudential Code and the creation of Treasury Management Committees.

Decision

The members of the Resources Board noted the report.

Action

Officers to draft responses for clearance by Lead Members.