Decision details

To review treasury management performance

27.1     The Committee considered a report by the Chief Operating Officer which presented a review of the County Council’s performance on treasury management for the year 2014/15 and mid year review for 2015/16.

27.2     The Committee discussed: Lender Option Borrower Option (LOBO) Loans and the low risk of loans being called in; internal borrowing as a means of funding capital projects and in particular the Bexhill Hastings Link Road; the LGA Municipal Bonds Agency, the lessons of the Municipal Assurance scheme and the effect on the Public Works Loans Board (PWLB); and the potential benefits of increasing the rate of investment into certain capital projects, designed to reduce revenue pressures, while interest rates are low.

27.3     The Committee was reassured that there was an extremely low risk of any LOBO loan being called in, following recent meetings with lenders, and that the Council would simply repay any loan without penalty should a loan be called in.  Similarly there are no plans to exercise the Borrower Option to repay any loans early.

27.4     With regard to internal borrowing, the link to the Capital Finance Requirement was explained, together with the advice from our advisors, Capita, about the reduced differential between interest being paid by the Council on borrowings, and interest being received on loans out. 

27.5     The Committee was reminded that that the Treasury Management Strategy had been amended by Cabinet to allow for investment in the Municipal Bonds Agency.  Membership of the Agency would allow access to European funding for large scale infrastructure requirements. 

27.6     RESOLVED to note the report.