INVITATION TO TENDER

PROVISION OF TREASURY

ADVISORY SERVICES

SECTION B

BACKGROUND & SPECIFICATION

  1. North East Lincolnshire Council

1.1.North East Lincolnshire is situated south of the River Humber. It covers an area of 74 square miles, has a population of around 156,000 living within 70,000 households and combines a mixture of industry, commerce and holiday resort. Created on 1 April 1996, North East Lincolnshire is one of four Unitary Authorities resulting from the abolition of Humberside County Council. It encompasses the administrative areas of two former boroughs, Great Grimsby Borough Council and Cleethorpes Borough Council. It is the largest employer in the area with approximately 7,000 employees.

1.2.It is a compact community of urban centres and surrounding villages. The major centres of population, Grimsby and Cleethorpes have their town centres only three miles apart. A further centre of population, Immingham, lies approximately 8 miles to the north west of Grimsby.

1.3.It contains sandy beaches and the area of natural outstanding beauty of the Wolds, forming an excellent base for touring one of England's cleanest and driest areas.

1.4.Today, the area has a diverse industrial base that continues to give economic stability even in periods of recession. The local economy is dominated by the food, tourism, chemical and port industries, giving the economic community well defined and special characteristics.

1.5.The gross revenue budget for 2006/07 was £416,450,000from 70,000Council Taxpayers, for 2007/08 it is £415,748,000.

  1. Contract Period

2.1.The Contract shall beeffective for a 2 year period. The Council reserves the right to extend the contract, by two further periods of up to 12 months each, subject to satisfactory performance of and negotiation with the successful tenderer. The commencement date for this Contract will be agreed with the successful Tenderer, although the Council anticipates that it will be operational from 1st December 2007.

2.2.The Council may terminate the Agreement at any time, subject to an agreed notice period, if it determines that the service provided by the Supplier(s) is unacceptable, having given the Supplier(s) reasonable opportunity to remedy the specified shortfalls as part of a formal problem escalation and resolution process. The Council wishes to develop a positive and mutually beneficial relationship with its Supplier(s) that is focused on continuous service improvement and development. Accordingly, this “default” provision will only be considered as a final action.

  1. Specification

3.1.Strategic Advice

3.1.1.To advise on suitable borrowing and investment strategies. These should take account of the underlying financial position of the Council and its future spending and income plans

3.1.2.To provide advice on the timing ,type and period of new borrowing from either PWLB or market sources

3.1.3.To provide advice on debt restructuring, funding policy, interest rate volatility and maturity profiles

3.1.4.To provide templates for

  • Annual Treasury Strategy including Investment Strategy and Prudential Indicators
  • Annual Treasury review
  • Treasury Management Practices

3.2.Economic Analysis and Interest Rate Forecasting

3.2.1.As support of borrowing and investment strategies provide weekly interest rate and PWLB forecasts and information on relevant economic and political changes which may impact on the Authorities borrowing & investment strategies.

3.2.2.Support to the in house team to promote maximum returns on investments including advice and regular updates on the creditworthiness of counterparties. Credit ratings must be provided from all three major rating agencies (Fitch, Moody’s and S & P) and evidence supporting a licence to distribute the ratings must be provided.

3.3.Capital Finance

3.3.1.To provide an annual review of its financial position including an analysis of the Balance Sheet and its contribution to the development of the overall treasury management strategy with particular reference to optimum debt and investment levels.

3.3.2.Advice on the use of the existing (and potential) regulatory framework and associated accounting issues to maximise the treasury and financing opportunities

3.4.Professional Codes

3.4.1.Advice on compliance and implementation of all relevant codes of practice with particular reference to

  • CIPFA Code of Practice on Treasury Management in the Public Services
  • CIPFA Prudential Code for Capital Finance in Local Authorities
  1. Contract management

4.1.The successful tenderer will be required to attend regular contract review meetings. The frequency of these meeting will be agreed with the Council, and it is expected that these will take place on a quarterly basis.

4.2.Tenderers should include details of an appropriate escalation path within their organisation to use in the event the Council may experience problems with any aspect of the contract.

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