Society of District Council Treasurers

Society of District Council Treasurers
Minutes of the VIRTUAL Executive Committee –
Held on 2nd March 2018
(Actual meeting cancelled due to adverse weather conditions)
SDCT Website:

In Attendance: All SDCT Executive members and contributors contributed virtually via e mail.

Goodbyes: The Executive passed on their thanks to Nick Eveleigh, Bob Palmer and Chris Brewer who were leaving the Executive due to various changes in their work roles.

1. Apologies: As above

2. Minutes of Previous Meetings and matters arising
The draft minutes of the previous meeting of 1st December (on the SDCT website). Actions have either been completed or picked up elsewhere on the agenda.

At the AGM on 5th January 2018 the Treasurer’s report was considered (on the SDCT website). The SDCT is currently in good financial health and it was recommended and agreed that the subscriptions for 2018 would be frozen once again at £200 for a single authority and £150 where the S151 officer is shared.

3. Local Government Finance Settlement 2018/19
The Settlement issues were covered fully at the AGM on 5th January by Nicola Morton and Katy Baldwin.
Since then, the final settlement was issued in February which resulted in an additional sum of £150m being granted for Adult Social Care as well as some increases to the rural service grants.

4. Business Rate Retention
Feedback from the various working groups attended is as follows…..

Steering Group (Jill Penn)
Meetings were held on 1st February and a further meeting was planned for 5th March. Minutes should be on LGA website. The group is also going to be working with the Ministry on the CSR. Tier splits are back on the agenda and Jill and Shelia Little (SCT President) are working together to ensure a consistent and well-argued case.
Fairer Funding Review Consultation and Working Group (Simone Hines)
LG Futures were commissioned by SDCT to carry out some work to assist Districts in responding to the Fairer Funding Consultation. This is attached and was circulated to all members on 3rd March.
The DCN response to the Fair Funding review has previously been circulated.

Systems Design Working Group (Mark Dickenson)
Mark attended the meeting of the BR Systems Design Meeting on 7th February and the notes of that meeting are attached.

5. Capital Strategies (Lisa Quinn Link Group)
The full presentation will be deferred to the meeting on 20th April. With regard to the Capital Strategy the key issues that members need to be aware of at this stage are:
We expect the potential timetable for local authorities to be as follows:
 Include new Code requirements, and progress with developing a Capital Strategy, as part of reporting to Full Council in February / Mar 2018 (we recognise that most have already reported) 
 Aim for reporting compliance during 2018/19 with full Capital Strategy implemented 2019/20

In terms of the support that we are geared up to provide:
 We recognise that trying to grasp the complexity of the CIPFA Codes / MHCLG guidance and produce a compliant and tailored Capital Strategy is going to be a considerable challenge
 We have developed a Capital Strategy support service, alongside our existing Capital Modelling Service, to assist local authorities with this challenging requirement
 The Capital Strategy support service complements the Treasury Advisory Service and our technical team are also geared up for supporting on compliance with the wider new requirements and the various support needs associated with commercial activity

6. Audit Update 
Ian Knowles will be taking the lead on Audit issues following Bob’s departure from the Executive.

6.1 PSAA
Jon Hayes reported that there was nothing specific to report at this time.

6.2 NAO
Aileen Murphie reported on the Homelessness recently been published by the NAO. The presentation is attached.

7. Advisor Reports
7.1 Insurance Mutual Proposals – The meeting on 26th February was attended on the Executives behalf by Andrew Vallance (Hart DC) and Matthew Fernandez – Graham (South Norfolk) and a note of the key points is attached. James Alexander who is the lead advisor at the LGA for the new LG Insurance Mutual, will attend the next meeting of the Executive on 20th April to give further detail.

7.2 ALATS 2/2/18
Jason and Angela had attended this meeting on behalf of SDCT. The main thrust of the meeting was ‘speaking with one voice’ – i.e. how the various treasurer’s societies could find more common ground and thereby strengthen the overall collective position of LG Finance to replace the current ‘divide and conquer’ approach.

There was also a pension’s presentation from Jeff Houston from the LGA. ALATS agreed they would like some advice from the pensions advisory board as the changes were starting to impact on many people in the workforce and were very complex. It was note that there was a duty of care to employees to provide advice on implications on the individual.

8. Reports from External Bodies / Sponsors: 

8.1 LINK (Lisa Quinn)
MHCLG Investment Guidance - key changes discussed in our technical release:
• The definition of an Investment, including Non-Treasury Investments and Loans
• Transparency and accountability including links to the Capital Strategy
• Introduction of new Indicators for Treasury and Non-Treasury Investment
• The Risk Management framework for Investments and Loans including exposure, credit control, credit loss models, use of external advisers and limits for categories of financial asset
• Investment liquidity
• Proportionality
• Borrowing in Advance of Need, which includes the potential impact on use of capital receipts
• Capacity, skills and culture

Areas of concern that the Executive may wish to consider:
• It would be good to get clarification from MHCLG on why the previous Borrowing in Advance of Need section, requiring a Member Approved policy for investment of any cash arising from taking loans in advance of capital expenditure, has been replaced by the current section. This change has produced wording which is causing confusion and has removed the need for Members to approve the policy.
• It would also be good if MHCLG could provide some examples of what is required in a Non-Treasury Investment schedule and issue some clarity on when it must be produced and whether non-compliance will cause S.151s major issues e.g. what happens if they buy a non-treasury investment after 1st April 2018 which is not in the Non-Treasury Investment schedule (assuming they manage to get this approved by Members).
• It would be good to ask the Executive if the golden rule of not borrowing to invest is easy to explain now that MHCLG guidance badges items of capital expenditure as Investment and link to S.12 in the guidance has been taken out in the 2018 version.
• We must stress that we are getting concerned about the risks that local authorities are taking on and off Balance Sheet which may create major financial problems for some in the future. There is a risk that deals being put to local authorities that may be suitable for the private sector but not local authorities and this is going to create some problems for S.151s who try to push back and are viewed as being difficult. When S151s do challenge they are faced with comments like "this is common practice in private sector and why do you need to know about revenue/capital - it is just cash!!"

Haringey decision:
• The Executive are likely to be aware of the Haringey decision, so just a reminder to consider the implications of this decision in terms of regeneration and its purposes, when looking at any commercial aspects. It has been discussed in several articles, see link to PF article:

Business Rates update:
• Just to alert the Executive to a report published by the Institute for Fiscal Studies on 1st March, see link to PF article below:

UK financial institutions - ring-fencing:
• Some points to note on ring-fencing:
 All approaches are different. It depends on the bank's interpretation of requirements and its current structure.
 Not a case of ring-fence good and non-ring-fence bad.
 First of all work out who you can deal with. In some cases might only be ring-fenced bank, others non-ring-fenced bank and others both. Then look at each entity on its own merit i.e. whatever criteria you have in your TMSS before deciding what you will do.
 Finally, always check to see which bank you are dealing with.

IFRS 9 update:
• SDCT will have seen the article by Rob Whiteman (attached) with regard to potential IFRS9 statutory override. We would particularly like to emphasise the final paragraph on downstream risk.

9. Any Other Business
Agenda for CIPFA Conference – ideas for the agenda to be discussed at the April meeting

10. Date of Next Meeting – 20th April 2018, CIPFA Offices, London

PART B items – Private Executive Issues
14.1 Feedback from AGM 5th January
The AGM was held on 5th January 2018 and feedback from the meeting had been positive. An issue has been raised as to whether early January was now the best time to hold the meeting. There was no conclusive view on this with some respondents favouring January and other favouring a potential move to later in the year. Currently the date of the 2019 AGM is 4th January 2019.

14.2 Website and Communications update (Peter)
To be considered at the meeting on 20th April

14.4 SDCT Non-Subscribers (Jill)
Issue of access to LGF work and discount for CiPFA Conference. Still waiting for list of non -subscribers but we need to think about a promotion of the Society especially as the tier splits issue is now raising a more urgent spectre.

14.5 Financial Arrangements (Jill)
The full financial arrangements would be fully reviewed once we had a better feel for the amount of resources required to improve the District ‘voice’ and communications issues. Sponsorship contributions would also be considered.

14.6 Update of Advisor areas and Executive Roles
Following Nicks departure (promotion to Chief Executive) – Simone Hines is now the SDCT Vice President and following an election, Jo Wagstaffe has been elected to Second Vice President. The advisor areas will be updated accordingly and other areas will need to be updated and reviewed (Angela to progress via e mail)