The Treasury Management Strategy supports the council in meeting its requirement to operate a balanced budget. This basically means that cash raised during the year will meet the cash spent. Part of the treasury management operation is to make sure that this cash flow is properly planned, with cash being available when it's needed. Any money left over is invested in low-risk counterparties, in line with the council's low-risk appetite. This provides adequate liquidity initially before considering investment return.
The other main function of the treasury management operation is the funding of the council's capital plans. These capital plans provide a guide to the borrowing needs of the council. This is, essentially, the longer-term cash flow planning to make sure that the council can meet its capital spending obligations.
The main strategic objectives of the Treasury Management Strategy are:
- To effectively manage and control the risks associated with treasury management activities giving regard to the Code, and all relevant legislation, criteria and limits set within this report.
- To ensure that sufficient cash is available to enable the council to discharge its financial obligations when they become due.
- To undertake all borrowing at or below budgeted rates on the basis of best value, and also seek opportunities to reduce the cost of servicing existing debt.
- To minimise the cost of any temporary borrowing (which is required for day-to-day cash flow reasons).
- To invest prudently having regard to the security and liquidity of investments, and investment return
- The council has one overriding consideration, which is counterparty security risk.
Treasury Management Strategy Statement and Annual Investment Strategy 2024-27