CUMBRIA POLICE & CRIME COMMISSIONER’S PUBLIC ACCOUNTABILITY CONFERENCE The Police and Crime Commissioner’s Public Accountability Conference will take place on Wednesday 15th November in Conference Room 3, Police Headquarters, Carleton Hall, Penrith, at 3.30pm. The purpose of the Conference is to enable the Police and Crime Commissioner to hold the Chief Constable to account for operational performance. V Stafford Chief Executive

Attendees: Police & Crime Commissioner - Mr Peter McCall (Chair) OPCC Chief Executive - Mrs Vivian Stafford Joint Chief Finance Officer - Mr Roger Marshall Chief Constable - Mr Jerry Graham

Enquiries to: Mrs P Coulter Telephone: 01768 217734 Our reference: PC 06 November 2017

Office of the Police and Crime Commissioner Carleton Hall

Penrith Cumbria CA10 2AU

Police & Crime Commissioner for Cumbria P McCall

Chief Executive S Edwards Chief Finance Officer/Deputy

Chief Executive R Hunter CPFA

Call 01768 217734 email commissioner@cumbria-pcc.gov.uk

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To September 2017 (Quarter 2)

The forecast overspend is largely as a result of police officer pay (£1,319k). Of this forecast overspend £712k is due to changes to the workforce plan (+29 recruits/transferees offset by 9 fewer officers at the start of the year) together with a number of acting up arrangements and temporary promotions in higher ranks. The effect of the Non-consolidated 1% award for officers amounts to £280k. The remaining overspend on police officer pay of £327k is attributable to an increase in the use of police overtime. Forecast spend on overtime has increased mainly due to the implementation of enhanced patrols to provide public reassurance following the terrorist incidents in Manchester and London as well as vacancies largely within specialist functions under Territorial Policing Command.

In addition, the forecast also includes several recently identified budget pressures which were not originally budgeted for: Consultancy for PSD audit tool & business analytics tool; In-house provision of canteen facilities across the Force; Adaptations to conference rooms; Funding of several new staff posts and exit costs associated with redundancies.

These overspends are being offset to a degree by: Underspends on police staff costs as a result of an increase in the number of vacant posts; underspends on the PCSO budget due to changes to workforce plan (started the year 4 fewer than budgeted for, recruiting 7 fewer in the year); savings on software licences (£153k); contribution to Police National ICT systems (£70k); a forecast reduction in fuel costs due to current low fuel prices (£115k) and over recovery of income (reimbursement of costs, rent, licensing income etc.).

Changes between June and September• Police Officer Pay forecast increasing by £560k (changes to the workforce plan outlined above).• Police Officer Pay increasing by £280k in respect of the 1% Non-consolidated Pay Award.• Police Officer Overtime increasing by £60k.• Staff Pay forecast underspend increasing by £238k as a result of extended vacancies, however this is offset by

additional expenditure of £114k due to the 1% Non consolidated Pay Award.• Supplies & Services forecast decrease largely due to a reduction in ICT related costs £110k.• Third Party Related Expenses new NPCC contributions £40k.• Income forecast increase due to increase in Reimbursed Services £55k.

HeadlinesThe current forecast of net expenditure amounts to £113.285m compared to a revised budget of£112.373m.

The variance amounts to a forecast overspend of £912k (0.81%) and is made up of a forecastoverspend on expenditure budgets of £982k (0.83%) offset by additional income of £70k (1.15%).

The overspend is made up of overspends on some categories totalling £1,521k which are beingpartially offset by underspends on others totalling £609k.

The forecast overspend at September has increased by £655k (255%) when compared to the figurereported as at the end of June of £257k.

The forecast as at the end of September assumes pay awards from September 2017 at 1% plus 1%Non-consolidated award for police officers, PCSOs staff. The total impact of the additional 1% (stillto be confirmed for PCSOs and Police Staff) is £412k for the financial year 2017-18.

Description Revised Provisional Provisional Provisional Forecast Change

Budget Outturn (Under)/

Overspend

(Under)/

Overspend

(Under)/

Overspend

from

JUN-17

2017/18 2017/18 2017/18 2017/18 @ JUN-17 to SEP-17

£'000s £'000s £'000s % £'000s £'000s

Constabulary Funding

Police Officers 79,075 80,394 1,319 1.67% 422 897

Police Community Support Officers 3,071 2,946 (125) -4.07% (132) 7

Police Staff 20,247 19,993 (254) -1.25% (140) (114)

Other Employee Budgets 2,209 2,411 202 9.14% 148 54

Transport Related Expenditure 2,199 2,134 (65) -2.96% (16) (49)

Supplies & Services 9,540 9,471 (69) -0.72% 23 (92)

Third Party Related Expenses 2,135 2,109 (26) -1.22% (66) 40

Total Constabulary Funding 118,476 119,458 982 0.83% 239 743

Income (6,103) (6,173) (70) 1.15% 18 (88)

Total Constabulary Funding Net of Income 112,373 113,285 912 0.81% 257 655

(600)

(400)

(200)

0

200

400

600

800

1,000

1,200

1,400

1,600

PoliceOfficers

PoliceCommunity

SupportOfficers

Police Staff OtherEmployeeBudgets

TransportRelated

Expenditure

Supplies &Services

Third PartyRelated

Expenses

Income

Fore

cast

Var

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'00

0

Quarterly Variance by Subjective Heading £'000

QTR 1 QTR 2 QTR 3 QTR 4

Corporate Support / Financial Services / Michelle Bellis / Mark Carter Page 1 of 1

Agenda Item 04

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8To September 2017

(Quarter 1 to Quarter 2)

HeadlinesThe current forecast of net expenditureamounts to £97.103m compared to a revisedbudget of £96.178m.

The variance amounts to a forecast overspendof £925k (0.96%) and is made up as follows:

A forecast overspend of £13k (0.08%) inrespect of the Commissioner’s budgets.

A forecast overspend on Constabularybudgets of £912k (0.81%) of which,£982k (0.83%) represents an overspendon expenditure budgets offset byadditional income of £70k (1.15%).

The forecast overspend has increased by£628k (167%) compared to the positionreported at the end of Quarter 1 (June). Ofthis increase £412k relates to the part-yeareffect of the forecast additional 1% payawardfor officers and staff, which was notincluded in the budget.

Police Property ActThe balance in the Police Property Act Fund at the end of September was £86k. During Quarter 1 awards were made to successful applicants totalling £21k.During Quarter 2 awards were made to successful applicants totalling £12k.

OverviewThe overspend on the Commissioner’s own budgets arises principally as a result of forecast overspend on insurance premiums (£11k) and premises related costs (£24k). The overspend on premises related costs includes additional spend on rates and additional fire risk assessments carried out on police estate following the fire at Grenfell Tower in London. These are partially offset by forecast underspends on the costs of the Office of the PCC (£26k).

With regard to the Constabulary overspend, the Constabulary is facing a number of budget pressures that have come to light since the budget was set for 2017/18. This includes additional overtime as a result of increased visible patrols to provide public reassurance following the terrorist incidents in Manchester and London, the 1% non-consolidated pay award for police officers from September 2017 and an assumed 1% non-consolidated pay award for PCSOs and staff also from September 2017.

These funding pressures have been discussed by the Chief Constable and Commissioner, and the Constabulary is currently seeking to manage expenditure during 2017/18 within the overall funding envelope provided by the Commissioner, although contingencies are held should this not be possible.

Changes between June and SeptemberThe forecast overspend has increased by £628k (214%) from £297k at June to £925k as at September.

Since June the forecast on the Commissioner’s own budgets has reduced by £27k. This is largely as a result of a forecast reduction in staff in OPPC (£19k) and a reduction to the forecast on premises.

The increase in forecast overspend in respect of funding provided to the Constabulary is largely as a result of increases to police pay (non-consolidated pay award (£280k) and changes to workforce plan (£560k)). This is offset by a forecast increase in the underspend on staff pay (£124k) after taking into account the assumed 1% non-consolidated pay award for staff also from September 2017.

Description Revised ProvisionalProvisional Provisional Forecast Change in

Budget Outturn (Under)/

Overspend

(Under)/

Overspend

(Under)/

Overspend

Forecast

JUN-17

2017/18 2017/18 2017/18 2017/18 @ JUN-17 SEP-17

£'000s £'000s £'000s % £'000s £'000s

Office of the Police and Crime Commissioner 784 758 (26) -3.32% (7) (19)

Other PCC Budgets (16,071) (16,032) 39 -0.24% 47 (8)

Movements To / (From) Reserves (908) (908) 0 0.00% 0 0

Total OPCC Budgets (16,195) (16,182) 13 -0.08% 40 (27)

Funding Provided to the Constabulary 112,373 113,285 912 0.81% 257 655

Net Expenditure 96,178 97,103 925 0.96% 297 628

External Funding (96,178) (96,178) 0 0.00% 0 0

Total 0 925 925 297 628

Corporate Support / Financial Services / Michelle Bellis / Mark Carter Page 1 of 1

Agenda Item 05

Page 1 of 4 Corporate Support/Financial Services/ Lorraine Holme and Michelle Bellis

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Quarter 2 July to September 2017

*A more detailed breakdown on a scheme by scheme basis is provided on page 2 with separate sections for each of the four main categories within the capital programme (Fleet, ICT, Estates & Other).

2017/18 Current Position Summary of Capital 2017/18

Budget £000s

Capital Expenditure

ICT Schemes 1,407

Fleet Schemes 2,495

Summary of Budget Movement 2017/18 2017/18 Estates Schemes 1,197

£000s Other Schemes 102

5,201

Capital Budget 2017/18 (approved 22/02/17) 6,521 Capital Financing

Impact of 2016/17 Outturn (approved 10/05/17) 1,259 Capital Receipts 0

New Schemes Approved/Drawndown 234 Revenue Contributions 1,586

Budgets Changes - Approved (242) Capital Grants 113

Approved Adjusted Budget 2017/18 7,773 Reserves 3,502

Borrowing 0

5,201

Capital Expenditure Outturn 2017/18 5,201

Forecast Variation (2,571) Table 2 2017/18

Forecast Variation summary £000s

Case and Custody (102)

Made up of: Mobility and Digital (895)

Budget Changes (Under)/Overspend (Table 1) (759) Red Sigma (257)

Slippage to 2018/19 (Table 2) (1,812) ICT Infrasturcture Solution Replacements (182)

(2,571) ICT Core Hardware Replacements (152)

Eden Deployment & Hostels (951)

CCTV (32)

(2,571)

Four-Year Capital Strategy Other than the reported slippage from 2017/18 schemes (which has the effect of moving budgets and corresponding financing from 2017/18 to 2018/19) there have been some changes to the ICT scheme budgets. Details of these changes along with recommendations to approve can be found over the page. Years 2018/19 to 2020/21 are still the same as those approved in February 2017 as part of the budget setting process.

*For a scheme by scheme analysis please see Appendix A on page 3.

Summary of Capital Budget 2017/18 to 2020/21

2017/18 2018/19 2019/20 2020/21

£000s £000s £000s £000s

Capital Expenditure

ICT Schemes 1,407 6,112 1,843 2,888

Fleet Schemes 2,495 745 744 1,981

Estates Schemes 1,197 3,600 905 1,120

Other Schemes 102 55 0 0

5,201 10,512 3,493 5,989

Capital Financing

Capital Receipts 0 0 532 1,470

Revenue Contributions 1,586 1,744 1,684 3,075

Capital Grants 113 4,993 527 394

Reserves 3,502 3,775 750 1,050

Borrowing 0 0 0 0

5,201 10,512 3,493 5,989

Recommendations

1) The Police and Crime Commissioner and Chief Constable are asked to note the current position in

relation to the capital programme for 2017/18.

2) The Commissioner is specifically asked to approve the recommendations (R1:R4) as set out on

page 2 of this capital update report.

Headlines The current forecast of net expenditure amounts to £5,201k compared to a revised budget of £7,773k a variance of £2,571k (33.08%) The variance is made up of returned budget of £759k on ICT schemes in relation to digital storage. This decision is linked to the business case being developed for body worn video, which incorporates some of the functionality of the digital storage solution. The remaining variance relates to slippage to future years of £1,812k. The largest element of slippage relates to the construction of the Eden Deployment Centre which is now scheduled for 2018/19 and early 2019/20. Other slippage relates to various ICT schemes which are detailed in the ICT section of this report. Total slippage is broken down as follows:

Table 1 % of Adjusted

Slippage Qtr 1 Qtr 2 Budget

ICT Schemes 0 (829) (829) 28%

Fleet Schemes 0 0 0 0%

Estates Schemes (951) 0 (951) 44%

Other Schemes 0 (32) (32) 24%

(951) (862) (1,812) 23%

Total

£000s

Page 2 of 4 Corporate Support/Financial Services/ Lorraine Holme and Michelle Bellis

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ICT Schemes

Narrative Some additional video conferencing facilities were provided for the recent business continuity test exercise. This was a major exercise and enabled the current video conferencing equipment to be fully tested. A number of lessons have been learned enabling a more informed choice regarding the procurement of the replacement equipment to be made. This testing has had the effect of delaying the procurement and it is unlikely that there will be any expenditure on this scheme in 2017/18. Expenditure on Red Sigma has been aligned to the Durham Constabulary Development Plan this has resulted in slippage of £257k. A Solution to bring the Hi-Tech crime systems on to the constabulary network has been developed. It is has a much lower up front investment but will require storage to be increased in the future. £182k has moved to future years to allow for this procurement. The national direction for digital evidence management is unclear at this time. The budget set aside for this work was £795 and has been returned at this time pending further direction and guidance. The budget (£130k) for identity & access management has been slipped to 2018/19 to align with the national project and a small amount (£20k) of the additional WIFI capacity budget has been profiled over 2 years into 2018/19. Recommendations for PCC approval R1) To approve slippage of £152k in relation to Enhanced Video Conferencing R2) To approve slippage of £88k on Case and Custody, £257k on Red Sigma, £182k on Hi Tech Crime, and note the return of £14k of budget from Case and Custody = total £541k R3) To approve the slippage of £150k and the return of £745k of budget from the Digital Policing Project

Capital Budget 2017/18 Original Impact of New Budget Approved Actual Forecast Forecast

Approved 2016/17 Schemes Changes Adjusted Expenditure Capital Variation

Budget Outturn Approved Approved Budget to Sep-17 Outturn

£000s £000s £000s £000s £000s £000s £000s £000s

ICT Schemes

ICT End User Hardware Replacements 150 103 4 0 257 183 257 0

ICT Core Hardware Replacements 581 0 60 (10) 631 0 479 (152)

ICT Infrastructure Solution Replacement 717 210 (70) 0 857 5 316 (541)

ICT Core Infrastructure Replacement 0 0 0 0 0 0 0 0

ICT Radio Replacement/ESN 37 10 0 0 47 34 47 0

Digital Policing Project 1,172 (6) 70 (32) 1,204 104 309 (895)

Total ICT Schemes 2,656 318 64 (42) 2,996 327 1,407 (1,588)

Other Schemes

Narrative The scheme to deliver a countywide CCTV capability is complete but the scheme also included a phase 2 project to provide a digital link into the criminal justice system. This part of the project is delayed due to national problems concerning the upgrades to the ICT systems used by the courts service. The budget and the financing for phase 2 has been moved to 2018/19. Recommendations for PCC approval R4) To note the slippage on the CCTV programme.

Capital Budget 2017/18 Original Impact of New Budget Approved Actual Forecast Forecast

Approved 2016/17 Schemes Changes Adjusted Expenditure Capital Variation

Budget Outturn Approved Approved Budget to Sep-17 Outturn

£000s £000s £000s £000s £000s £000s £000s £000s

Other Schemes

Leadership & Skills - Blended Learning 79 0 0 0 79 0 79 0

CCTV 0 32 0 0 32 1 0 (32)

Portable Ballistic Equipment 23 0 0 0 23 0 23 0

Total Other Schemes 102 32 0 0 134 1 102 (32)

Estates Schemes

Narrative Work is continuing on the final business case for the Eden Deployment Centre and work has begun on the enabling works at the Green. It is felt that once the case gets approval and the contracts are signed in February 2018 a maximum of £500k will be spent on the scheme in 2017/18. This has resulted in slippage from the original plan of £951k was which reported in qtr 1. The negotiations regarding the sale of the old Barrow police station are now complete and the sale is expected to complete in November. The purchase of a piece of land on the HQ site, which was formally added into the capital programme during qtr 1, was completed during qtr 3. All other schemes are on track to complete during the 2017/18 financial year. No Recommendations for PCC approval

Capital Budget 2017/18 Original Impact of New Budget Approved Actual Forecast Forecast

Approved 2016/17 Schemes Changes Adjusted Expenditure Capital Variation

Budget Outturn Approved Approved Budget to Sep-17 Outturn

£000s £000s £000s £000s £000s £000s £000s £000s

Estates Schemes

South Estate - Barrow & Ulverston 0 0 0 0 0 (273) 0 0

HQ Electrical Infrastructure 0 0 0 0 0 (17) 0 0

HQ Demolition of The Green 97 0 0 0 97 27 97 0

Eden Deployment Centre 1,408 43 0 0 1,451 120 500 (951)

Workington Land Purchase 0 500 0 (200) 300 0 300 0

HQ Land Purchase 0 0 120 0 120 0 120 0

Heating, ventilation & cooling plant @ Durranhill 30 0 0 0 30 0 30 0

HQ Static invertor 50 0 0 0 50 0 50 0

HQ Flood Defence 50 0 50 0 100 2 100 0

Total Estates Schemes 1,635 543 170 (200) 2,148 (141) 1,197 (951)

Fleet Schemes

Narrative Orders have been placed for a significant number of vehicles within the 2017/18 fleet programme. For this reason the programme is at this stage is being reported as on budget however likely that there will be some slippage into future years as delivery timescales become clear. The whole fleet programme is being reviewed and re-programmed as part of the 10 year capital planning process. This work is now well underway and a number of vehicles have been earmarked for removal. No Recommendations for PCC approval

Capital Budget 2017/18 Original Impact of New Budget Approved Actual Forecast Forecast

Approved 2016/17 Schemes Changes Adjusted Expenditure Capital Variation

Budget Outturn Approved Approved Budget to Sep-17 Outturn

£000s £000s £000s £000s £000s £000s £000s £000s

Fleet Schemes

Vehicle Replacements - 16/17 & 17/18 1,938 307 190 0 2,435 83 2,435 0

Fleet - Balistically Protected Vehicle 0 60 0 0 60 0 60 0

VASCAR 190 0 (190) 0 0 0 0 0

Total Fleet Schemes 2,128 367 0 0 2,495 83 2,495 0

Page 3 of 4 Corporate Support/Financial Services/ Lorraine Holme and Michelle Bellis

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Appendix A – Four-year capital strategy on a scheme by scheme analysis

Project NameSpend to

31 Mar '17

Projected

Outurn

2017/18

Projected

Outurn

2018/19

Projected

Outurn

2019/20

Projected

Outurn

2020/21

Projected

Total

Cost

Variance

(Under) /

Overspend

£ £ £ £ £ £ £

ICT SCHEMES

Firm Schemes

- ICT End User Hardware Replacements 1,634,746 256,645 0 0 0 1,891,391 0

- ICT Infrastructure Solution Replacement 60,863 0 0 0 0 60,863 0

- ICT Core Hardware Replacements 3,286,926 0 0 0 0 3,286,926 0

- ICT Hardware Replacements - Radio / ESN 0.00 46,878 0 0 0 46,878 0

- Case and Custody 691,386 65,016 88,500 0 0 844,902 -14,098

- Digital Policing Project 1,803,664 309,036 157,140 7,283 7,428 2,284,550 -745,023

- Red Sigma 22,355 70,000 256,828 0 0 349,183 0

- WAN 73,630 80,370 0 0 0 154,000 0

- Hi Tech Crime Improvements 0 50,000 0 0 0 50,000 0

Delegated / Indicative Schemes

- ICT End User Hardware Replacements 0.00 0 763,940 143,810 98,971 1,006,721 0

- ICT Infrastructure Solution Replacement (D) 0.00 50,600 1,673,360 112,386 53,382 1,889,728 0

- ICT Core Hardware Replacements (D) 0.00 478,814 662,445 1,579,865 2,728,032 5,449,156 -9,586

- ICT Core Infrastructure Replacement 0.00 0 0 0 0 0 0

- ICT Radio Replacement / ESN (D) 0.00 0 2,510,000 0 0 2,510,000 0

SUB TOTAL ICT SCHEMES 7,573,570 1,407,358 6,112,213 1,843,344 2,887,813 19,824,298 -768,707

FLEET SCHEMESFirm Schemes - Vehicle Replacements - 16/17 & 17/18 930,679 2,434,906 0 0 0 3,365,585 0Indicative Schemes

- Vehicle Replacements - Future Years 0.00 0 744,848 744,332 1,980,720 3,469,900 0 - Fleet - Balistically Protected Vehicle 60,000 0 0 0 60,000 0 - VASCAR 0 0 0 0 0 0

SUB TOTAL FLEET SCHEMES 930,679 2,494,906 744,848 744,332 1,980,720 6,895,485 0

TOTAL CONSTABULARY PROGRAMME 8,504,249 3,902,264 6,857,061 2,587,676 4,868,533 26,719,783 -768,707

Project NameSpend to

31 Mar '17

Projected

Outurn

2017/18

Projected

Outurn

2018/19

Projected

Outurn

2019/20

Projected

Outurn

2020/21

Projected

Total

Cost

Variance

(Under) /

Overspend

£ £ £ £ £ £ £

ESTATES SCHEMESFirm Schemes - South Cumbria Estate 9,139,675 0 0 0 0 9,139,675 0

- Estates - HQ Electrical Infrastructure 702,974 0 0 0 0 702,974 0

- HQ - Carpark 186,755.01 0 0 0 0 186,755 0 - Demolition of the Green 0.00 27,354 0 0 0 27,354 0 - Eden Deployment Centre 7,050.00 119,838 0 0 0 126,888 0 - Workington - Land Purchase 0.00 300,000 0 0 0 300,000 0 - HQ - Land Purchase 0.00 120,000 0 0 0 120,000 0 - UPS - HQ 0.00 0 0 100,000 0 100,000 0 - Roof Repairs - Various 0.00 0 37,625 55,000 70,000 162,625 0 - Heating & ventilation @ Durranhill 0.00 30,000 0 0 0 30,000 0 - HQ Static invertor 0.00 50,000 0 0 0 50,000 0 - Flood works at HQ 0.00 100,000 0 0 0 100,000 0

Indicative/Delegated Schemes - Estates - Demolition of the Green (D) 0 69,617 0 0 0 69,617 0 - Eden NPT and Hostel (D) 380,162 3,062,150 0 0 3,442,312 0 - Garage Provision (I) 0.00 0 500,000 0 0 500,000 0 - West Resilience Flood Management (I) 0.00 0 0 750,000 1,050,000 1,800,000 0

SUB TOTAL ESTATES SCHEMES 10,036,454 1,196,971 3,599,775 905,000 1,120,000 16,858,200 0

OTHER SCHEMESFirm Schemes - CCTV 1,088,194 0 32,339 0 0 1,120,533 0 - L&D - Blended Learning 0.00 79,000 0 0 0 79,000 0 - Print Room Equipment 0.00 0 0 0 0 0 0Indicative/Delegated Schemes

- Portable Ballistic Equipment (I) 0.00 23,050 23,050 0 0 46,100 0

SUB TOTAL OTHER SCHEMES 1,088,194 102,050 55,389 0 0 1,245,633 0

GRAND TOTAL CAPITAL PROGRAMME 19,628,897 5,201,285 10,512,225 3,492,676 5,988,533 44,823,616 -768,707

Agenda Item 7

Corporate Support / Financial Services / MB & LVH Page 1 of 4

Treasury Management Activities 2017/18 Quarter 2 (July to September 2017)

PAC Finance Meeting 15 November 2017 and JASC Meeting 22 November 2017

Purpose of the Report

The purpose of this paper is to

report on the Treasury Management

Activities (TMA), which have taken

place during the period July to

September 2017, in accordance with

the requirements of CIPFA’s Code of

Practice on Treasury Management.

TMA are undertaken in accordance

with the Treasury Management

Strategy Statement (TMSS) and

Treasury Management Practices

(TMPs) approved by the

Commissioner in February each

year.

Recommendations

The Commissioner is asked to note

the contents of this report.

JASC Members are asked to note the

contents of this report. The report is

provided as part of the

arrangements to ensure members

are briefed on Treasury

Management and maintain an

understanding of activity in support

of their review of the annual

strategy.

Economic Background

The UK economy faces a challenging

outlook as the minority government

continues to negotiate the country's

exit from the European Union. Some

data has held up better than

expected, with unemployment

falling to an all-time low and house

prices remaining relatively resilient.

The Bank of England made no

change to monetary policy at its

meetings in the first half of the

financial year. The vote to keep Bank

Rate at 0.25% narrowed to 5-3 in

June highlighting that some MPC

members were more concerned

about rising inflation than the risks

to growth. Although at September’s

meeting the Committee voted 7-2 in

favour of keeping Bank Rate

unchanged, the MPC changed their

rhetoric, implying a rise in Bank Rate

in "the coming months". The

Commissioners treasury advisor

Arlingclose was not convinced at the

time that the UK’s economic outlook

justifies such a move at this stage,

but the Bank’s interpretation of the

data seems to have shifted. Indeed,

in November the MPC did increase

the base rate by 0.25% to 0.50%.

TM Operations and Performance

Measures

The Commissioners day to day TMA

are undertaken in accordance with

the TMSS. The TMSS establishes an

investment strategy with limits for

particular categories of investment

and individual counterparty limits

within the categories.

Outstanding Investments: As at 30

September 2017 the total value of

investments was £24.863m and all

were within TMSS limits. The chart

below shows the outstanding

investments at 30 September by

category.

A full list of the investments that

make up the balance of £24.863m is

provided at Appendix A.

Investment Activity: During quarter

2 a number of investments were

made within TM categories 1-3

(banks unsecured, banks secured

Agenda Item 7

Corporate Support / Financial Services / MB & LVH Page 2 of 4

and Government) primarily as a

result of the Pension grant that is

received in advance of spend in July.

In addition to the above there are

regular smaller investments made

via money market funds (category 5

pooled funds).

Non-specified investments: The

TMSS sets a limit for investments

with a duration of greater than 364

days at the time the investment is

made (known as non-specified

investments), this limit is £5m. At 30

September, the Commissioner had

only one investment that met this

description. This investment still has

an outstanding duration of over 364

days. The investment in this

category is:

Leeds Building Society £2.2m 887

days (13/07/16 to 17/12/18)

Investment Income: The budget for

investment interest receivable in

2017/18 is £75k. The current

forecast against this target is that

the actual will be on budget

although it is still relatively early in

the financial year to provide an

accurate estimate. Factors such as

future interest rates available and

investment balances will impact.

The average return on investment at

the end of quarter 2 is 0.31%. As a

measure of investment performance

the rate achieved on maturing

investments of over 3 months in

duration is compared with the

average BOE base rate. The table

below illustrates the rate achieved

on the one maturing investment of

over three months duration in

quarter 2 compared with the

average base rate for the duration of

the investment.

Cash Balances: The aim of the TMSS

is to invest surplus funds and

minimise the level of un-invested

cash balances. The actual un-

invested cash balances for the

period July to September are

summarised in the table below:

The bank account had large un-

invested balances on one occasion.

The largest un-invested balance

occurred on the 6 September

(£119k) where a BACS deposit was

received late in the afternoon in

respect of an invoice for special

policing services provided for the

Kendal Calling music festival. The

largest overdrawn balance occurred

on the 15 September 2017 over a

weekend and was as a result of an

oversight where by a planned

redemption from a money market

fund was not requested. Bank

charges are billed on a quarterly

basis in arrears. The charge that

relates to the overdrawn period will

be reported in quarter 3 once it has

been received. A reminder has now

been set in 2 electronic diaries to

prompt a bank account check at

midday every day to prevent this

happening in the future.

Prudential Indicators

In accordance with the Prudential

Code, the TMSS includes a number

of measures known as Prudential

Indicators which determine if the

TMSS meets the requirements of the

Prudential Code in terms of

Affordability, Sustainability and

Prudence. An analysis of the current

position with regard to those

prudential indicators for the

financial year 2017/18 is provided at

Appendix B. The analysis confirms

that the Prudential Indicators set for

2017/18 are all being complied with.

MonthNumber of

Investments

Total Value

of

Investments

£m

July 2017 5 12.0

August 2017 0 0.0

September 2017 1 2.0

Borrower Value Period Actual

Rate

Average

Base Rate

£m (Months) (%) (%)

Lloyds Bank £2m 12 1.00% 0.25%

Number

of Days

Average

Balance

Largest

Balance

£ £

Days In Credit 89 4,107 118,779

Days Overdrawn 3 (549,195) (549,195)

Agenda Item 7

Corporate Support / Financial Services / MB & LVH Page 3 of 4

Appendix A Investment Balance at 30 September 2017

Category/InstitutionCredit

Rating

Investment

Date

Investment

Matures

Days to

MaturityRate Amount

Counterparty

Total

(%) (£) (£)

Nationwide Building Society A+ 05/07/2017 22/12/2017 83 0.29% 2,000,000 2,000,000

Landesbank Hessen-Thuringen (Helaba) A+ 07/07/2017 30/11/2017 61 0.27% 2,000,000 2,000,000

Svenska (Deposit Account) AA Various On Demand N/A 0.30% 1,966,719 1,966,719

NatWest (Liquidity Select Account) BBB+ 30/06/2017 01/07/2017 O/N 0.10% 58,000 58,000

6,024,719 6,024,719

Category 2 - Banks Secured (Includes Banks & Building Societies)

Leeds Building Society (Bond) AAA 13/07/2016 17/12/2018 443 0.68% 2,141,288 2,141,288

2,141,288 2,141,288

Category 3 - Government (Includes HM Treasury and Other Local Authorities)

East Dunbartonshire Council NR 07/03/2017 06/03/2018 157 0.50% 2,000,000 2,000,000

The Morey Council NR 27/09/2017 31/01/2018 123 0.28% 2,000,000 2,000,000

Lancashire County Council NR 18/04/2017 17/04/2018 199 0.60% 2,000,000 2,000,000

Treasury Bills NR 10/07/2017 08/01/2018 100 0.23% 3,995,418 3,995,418

Treasury Bills NR 17/07/2017 15/01/2018 107 0.20% 1,998,007 1,998,007

11,993,425 11,993,425

Category 4 -Registered Providers (Includes Providers of Social Housing)

None 0 0

0 0

Category 5 -Pooled Funds (Includes AAA rated Money Market Funds)

Invesco AAA Various On demand O/N 0.47% 700,000 700,000

Fidelity AAA Various On demand O/N 0.16% 3,919 3,919

Goldman Sachs AAA Various On demand O/N 0.45% 300,000 300,000

Aberdeen Asset Management AAA Various On demand O/N 0.18% 200,000 200,000

Standard Life (Formally Ignis) AAA Various On demand O/N 0.25% 3,500,000 3,500,000

4,703,919 4,703,919

Total 24,863,352 24,863,352

Category 1 - Banks Unsecured (Includes Banks & Building Societies)

Note – The credit ratings in the table & chart relate to

the standing as at 30 Septemner 2017, these ratings are constantly

subject to change.

Agenda Item 7

Corporate Support / Financial Services / MB & LVH Page 4 of 4

Appendix B Prudential Indicators 2017/18

Prudential Indicator - With Targets To ReviewApproved

Indicators

Current

ValueWithin

TMSS Target

£m £m

The Authorised Limit

Total Authorised Limit 24.478 4.887 P

The Operational Boundry

Total Operational Boundry 22.978 4.887 P

Interest Rate Exposure

Net Principal sums Outstanding at Fixed Rates 24.478 4.887 P

Net Principal sums Outstanding at Variable Rates 1.500 0.000 P

Upper Limit for total principal sums invested for over 364 Days

The purpose of this indicator is to ensure that the commissioner has protected himslef against the risk of loss arising from

the need to seek early redemption of princiapl sums invested.

Non Specified Investments with a maturity greater than

364 days 5.000 2.200 P

Prudential Indicator - To NoteNet Borrowing and the Capital Financing Requirement

Net Debt (section 12 below provides analysis) (15.280) (16.380)

Capital Financing Requirement as at 31 March 17.978 17.980

Net external Borrowing 0.000 0.000

Capital Expenditure and Capital financing

Expenditure 6.521 5.201

Financing and Funding 0.000 0.000

Ratio of Financing Costs to Net Revenue Stream

Financing Costs 0.348 0.348

Net Revenue Stream 96.178 96.178

Ratio 0.36% 0.36%

Capital Financing Requirement

CFR including PFI & other long term liabilties 17.978 17.980

CFR excluding PFI & other long term liabilties 13.091 13.093

Actual External Debt

External Debt including PFI & other long term liabilties 4.887 4.887

External Debt excluding PFI & other long term liabilties 0.000 0.000

Impact of capital investment decisions on the Council Tax

Capital Expenditure funded from revenue 1.584 1.584

Incremental Impact on Band D Council Tax 9.485 9.484

Gross and Net Debt

Outstanding Borrowing (at notional value) 0.000 0.000

Other Long Term Liabilities (PFI & Finance Lease) 4.887 4.887

Less Investments 20.167 21.267

Net Debt (15.280) (16.380)

Maturity Structure of Borrowing

Not Applicable - currently no external debt

12The purpose of this indicator is highlight a situation where the Commissioner is planning to borrow in advance of need.

13 The indicator is designed to exercise control over the Commissioner having large consentrations of fixed rate debt needing

to be repaid at any one time.

9 The CFR is a measure of the extent to which the commissioner needs to borrow to support capital expenditure only. It

should be noted that at present all borrowing has been met internally.

10 It is unlikely that the Commissioner will actually exercise external borrowing until there is a change in the present structure

of investment rates compared to the costs of borrowing

11 This indicates the incremental impact of the capital investment decisions funded from prudential borrowing proposed for

the period 2016/17 based on a Band D property in line with the proposed council tax level.

8 This is an indicator of affordability and highlights the revenue impliations of exisiting and proposed capital expenditure by

identifiying the proportion of revenue budget required to meet financing costs

1 The authorised limit represents an upper limit of external borrowing that could be afforded in the short term but may not

sustainable. It is the expected amximum borrowing need with some headroom for unexpecteed movements. This is a

2 The operational boundry respresents and estimate of the most likely but not worse case scenario it is only a guide and may

be breached temporarily due to variations in cashflow.

3/4The purpose of this indicator is to contain the Commissioners exposure to unfavourable movements in future interset

rates.. This represents the position that all of the Commissioner's auhorised external borrowing may be at a fixed rate at

any one time.

5

6This indicator is to ensure that net borrowing will only be for capital puposes. The commissioner should ensure that the

net external borrowing does not exceed the total CFR requirment from the preceeding year plus any additional

borrowing for the next 2 years.

7 The original and current forecasts of capital expenditure and the amount of capital expenditure to be funded by prudential

borrowing for 2016/17