Room for improvement in treasury training for members

Finance officers must work harder to educate and train members on the treasury function, according to panelists at last week’s Local Authority Treasurers Investment Forum.

Treasury management can be obscure to members, much more so than pensions, as there is little to interest them in it, said Councillor Nick Buckmaster, the chairman of the pension fund for the London Borough of Waltham Forest. While member engagement on finance is “essential”, many finance officers never get questions on, for example, Treasury Management Strategy, said Buckmaster.

“We get questions on it at our council but it is rare,” he said. “We need to bring up issues of strategy, how we’re going to make returns and to emphasise that this is not straight borrowing and lending, it’s more complex than that. That scares members a touch.”

Rachel Musson, corporate head of finance and commerce at Shropshire County Council agreed that investment strategy must be well explained to members. Where advice is coming from and what it is is also important, she pointed out, and members need to be given reassurance on how the treasury function is being managed.

“One of the key things is about understanding the long term nature of money management,” said Musson. “That can be a dilemma against the more short term nature of the political environment.”

Treasury Management Strategies and CIPFA checklists can help inform members, but Richard Harbord, chief executive of Boston Council, thought that the TMS is often not enough. “Some treasury management policies have everything in that they have to have in but communicate very little on how you operate and how you should be operating. We could do a lot better in serving our members in that way,” he commented.

Training members on finance was also seen as a good option, but panelists advised caution on a ‘one size fits all’ approach. “You can’t have a standard fix,” said Harbord. “There’s no hope in having this ambition to educate and train a whole council to understand the treasury management policy. I do think that people who serve on the audit and governance panel need to have the right sort of training to be able to challenge what is put before them otherwise it is pointless. So they need special, in depth training.”

Buckmaster proposed training perhaps half a dozen members who showed an interest in finance. “Councils can ask themselves what the training is there to achieve,” added Musson. “It is primarily for education but also to provide members with assurance that risks are being appropriately managed and that they are in safe hands and to give them enough information that they can challenge us.”