Corporate and Cultural Services 28 January 2014 Joint Strategic Committee Date: 6 February 2014 Time: 6:30pm or the conclusion of a simultaneous meeting of the Joint Strategic Committee and Joint Governance & Audit Committee starting at 6.00pm Venue: Council Chamber, Civic Centre, Shoreham-by-Sea Adur Cabinet: Councillors Neil Parkin (Leader), Julie Searle (Deputy Leader), Pat Beresford, Keith Dollemore, Angus Dunn, Jim Funnell and David Simmons Worthing Cabinet: Councillors Paul Yallop (Leader), Bryan Turner (Deputy Leader), Daniel Humphreys, Mary Lermitte, Clive Roberts and Tom Wye Agenda Part A 1. Declarations of Interest Members and officers must declare any disclosable pecuniary interests in relation to any business on the agenda. Declarations should also be made at any stage such an interest becomes apparent during the meeting. If in doubt contact the Legal or Democratic Services representative for this meeting. 2. Minutes To approve the minutes of the Joint Strategic Committee meeting held 7 January 2014, copies of which have been previously circulated. 1 3. Public Question Time To receive any questions from members of the public. 4. Items Raised Under Urgency Provisions To consider any items the Chairman of the meeting considers to be urgent. 5. Joint Treasury Management Strategy Statement and Annual Investment Strategy 2014/15 to 2016/17 for Adur District Council and Worthing Borough Council To consider a report from the Executive Head of Financial Services, a copy is attached as item 5. 6. West Sussex Joint Scrutiny Task and Finish Group – Flooding Review To consider a report from the Chief Executive, a copy is attached as item 6. 7. West Sussex Local Flood Risk Management Strategy To consider a report from the Strategic Director (AG), a copy is attached as item 7. 8. Revised Housing Allocation Policies To consider a report from the Executive Head of Housing, Health & Community Safety, a copy is attached as item 8. 9. Worthing – Community infrastructure Levy (CIL) Draft Charging Schedule and Draft Developer Contributions Supplementary Planning Document (SPD) To consider a report from the Executive Head of Planning, Regeneration and Wellbeing, a copy is attached as item 9. 10. Notice of Motion to WBC (17 Dec) report to JSC - Mental Health To consider a report from the Executive Head of Planning, Regeneration and Wellbeing, a copy is attached as item 10. 11. Options for the River Adur Internal Drainage District To consider a report from the Strategic Director (AG), a copy is attached as item 11. 2 12. Adur Homes Decent Homes Work Programme 2014/15 To consider a report from the Head of Adur Homes, a copy is attached as item 12. 13. Use of Compulsory Purchase Order relating to the Completion of Shoreham Beach Boardwalk To consider a report from the Executive Head of Planning, Regeneration and Wellbeing, a copy is attached as item 13. 14. Exclusion of the Press and Public In the opinion of the Proper Officer the press and public should be excluded from the meeting for consideration of the following items. Therefore the meeting is asked to consider passing the following resolution: 'that under Section 100A(4) of the Local Government Act 1972, the public and press be excluded from the meeting from the following items of business on the grounds that they involve the likely disclosure of exempt information as defined in the paragraph of Part 3 of Schedule 12 A to the Act indicated against the item'. Part B - Not for Publication – Exempt Information Reports 15. Sale of Grafton Site To consider a report from the Strategic Director (AG), a copy is attached as item 15. For Democratic Services enquiries For Legal Services enquiries relating relating to this meeting please contact: to this meeting please contact: Neil Terry Susan Sale Senior Democratic Services Officer Solicitor to the Council 01903 221073 01903 221119 [email protected] [email protected] The agenda and reports are available on the Councils website, please visit www.adur-worthing.gov.uk 3 4 Joint Strategic Committee 6th February, 2014 Agenda Item No: 5 Joint Governance and Audit th 20 March, 2014 Agenda Item No: xx Ward: All TITLE: Joint Treasury Management Strategy Statement and Annual Investment Strategy 2014/15 to 2016/17 Adur District Council and Worthing Borough Council REPORT BY: Sarah Gobey, Executive Head (Financial Services) 1.0 BACKGROUND 1.1 The Chartered Institute of Public Finance and Accountancy’s Code of Practice for Treasury Management in Public Services (the “CIPFA TM Code”) requires local authorities to determine before the start of the financial year the Treasury Management Strategy Statement (TMSS) and Annual Investment Strategy (AIS).Together these elements prescribe the parameters within which treasury management shall operate, which is defined by CIPFA as: “the management of the organisation’s investments and cash flows, its banking, money market and capital market transactions; the effective control of the risks associated with those activities; and the pursuit of optimum performance consistent with those risks.” 1.2 In compiling the TMSS and AIS The Local Government Act 2003 (the Act) and supporting regulations also require the Councils to ‘have regard to’ the CIPFA Prudential Code and the CIPFA Treasury Management Code of Practice to set Prudential and Treasury Indicators for the next three years. This is to ensure that the Councils’ capital investment plans are affordable, prudent and sustainable. 1.3 Consequently, this report fulfils the requirements under the TM Code to present the TMSS and AIS before the start of the new financial year, including the Prudential Indicators, for the next three years 2014/15-2016/17. 1.4 The report also considers the expected treasury position, the proposed strategy for borrowing, and the prospects for interest rates in the prevailing economic conditions, all of which together set the context in which treasury management decisions will be taken. 1.5 Each Council is responsible for its own treasury management decisions and activity. No treasury management activity is without risk. The successful identification, monitoring and control of risk is an important and integral element of treasury management activities. Hence, these considerations have been incorporated within the strategies presented in this report. The main risks to the Councils’ treasury management activities are: R10bb Joint Treasury M’ment Strategy St’ment 1 Joint Strategic Committee 06.02.14 Agenda Item No: 5 & Annual Investment Strategy Joint Governance & Audit 20.03.14 Agenda Item No: xx 5 1.0 BACKGROUND • Liquidity Risk (Inadequate cash resources) • Market or Interest Rate Risk (Fluctuations in interest rate levels) • Inflation Risk (Exposure to inflation) • Credit and Counterparty Risk (Security of Investments) • Refinancing Risk (Impact of debt maturing in future years) • Legal and Regulatory Risk 1.6 In managing these risks consideration has been given to the impact of the Councils’ Revenue Budget and Capital Programme on the Balance Sheet position, the current Treasury position projected forward (Appendix A), the outlook for interest rates (Section 3), and the Prudential Indicators & Limits for borrowing. 1.7 To summarise, the purpose of this TMSS and AIS report is to: • Approve the Proposed Treasury Management Strategy for 2014/15-2016/17 (Borrowing - Section 4, and Debt Rescheduling - Section 5) • Approve the Joint Annual Investment Policy & Strategy (Section 6) • Approve the Prudential Indicators for 2014/15-2016/17 (Appendix B) • Approve the Minimum Revenue Provisions (MRP) Statement for 2014/15 (Section 8) • Approve the use of Specified and Non-Specified Investments 2014/15 (Appendix C) • Note The scheme of delegations (Appendix D) • Note any other matters of significance (Section 11) 2.0 BALANCE SHEET AND TREASURY POSITION 2.1 The Councils’ expected treasury portfolio at 31 March 2014, with forward projections, is summarised below. The Table compares the underlying need to borrow for Capital purposes (the Capital Financing Requirement, or CFR) with the projected external debt (the treasury management operations) highlighting any over or under borrowing position for capital investment purposes. For Adur, the comparison is expanded to show the General Fund and Housing Revenue Account (HRA) elements. R10bb Joint Treasury M’ment Strategy St’ment 2 Joint Strategic Committee 06.02.14 Agenda Item No: 5 & Annual Investment Strategy Joint Governance & Audit 20.03.14 Agenda Item No: xx 6 2.0 BALANCE SHEET AND TREASURY POSITION 2013/14 2013/14 2014/15 2015/16 2016/17 Adur District Council Estimate Revised Estimate Estimate Estimate £m £m £m £m £m Capital Financing Requirement (CFR) General Fund 12.892 14.076 15.108 15.361 16.713 Housing Revenue A/c 66.078 65.562 63.994 63.284 62.655 Total CFR 78.970 79.638 79.102 78.645 79.368 Current Actual Debt General Fund (16.490) (13.185) (12.969) (12.969) (12.968) Housing Revenue A/c (65.818) (64.982) (62.993) (61.287) (59.581) Actual Debt Projected (82.308) (78.167) (75.962) (74.255) (72.549) Forward (Appx A) (Over)/Under Borrowing General Fund (3.600) 0.891 2.139 2.392 3.744 Housing Revenue A/c 0.260 0.580 1.001 1.997 3.074 Total (Over)/Under Borrowing Based on (3.340) 1.471 3.140 4.390 6.819 Actual Debt projected forward Cumulative maximum planned Borrowing per - - (1.916) (3.913) (7.088) CIP Projected (Over) Under Borrowing Represented (3.340) 1.471 1.224 0.477 (0.269) by: General Fund 0.891 0.371 (0.366) (1.101) HRA 0.580 0.853 0.843 0.832 2.2 For Adur Council there is an increasing under borrowed position for both General Fund and HRA based on the on actual debt at 31 March 2014 projected forward (i.e.