Treasury management strategy report 2016-17
We are required to operate a balanced budget, which broadly means that cash raised during the year will meet cash expenditure. Part of the treasury management operation is to ensure that this cash flow is adequately planned, with cash being available when it is needed. Surplus monies are invested in low risk counterparties or instruments commensurate with our low risk appetite, providing adequate liquidity initially before considering investment return.
The second main function of the treasury management service is the funding of our capital plans. These capital plans provide a guide to our borrowing needs, essentially the longer term cash flow planning, to ensure that we can meet our capital spending obligations. This management of longer term cash may involve arranging long or short term loans, or using longer term cash flow surpluses. On occasion, any debt previously drawn may be restructured to meet our risk or cost objectives.
CIPFA defines treasury management as:
"The management of the local authority'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."