Issue - meetings

Matter for Decision

 

The Council is required by regulations issued under the Local Government Act 2003 to produce an annual treasury report reviewing treasury management activities and the actual prudential and treasury indicators for each financial year.

 

This report meets the requirements of both the CIPFA Treasury Management in the Public Services: Code of Practice 2021 (the Code) and the CIPFA Prudential Code for Capital Finance in Local Authorities 2021 (the Prudential Code) in respect of 2022/23.

During 2022/23 the minimum requirements were that Council should receive:

      i.         an annual strategy in advance of the year;

    ii.         a mid-year treasury update report; and

   iii.         an annual review following the end of the year describing the activity compared to the strategy (this report).

In line with the above Codes of Practice, all treasury management reports are presented to both Strategy & Resources Scrutiny Committee and to full Council.

 

Decision of the Executive Councillor for Finance & Resources:

 

To recommend this report to Council, which includes the Council’s actual Prudential and Treasury Indicators for 2022/23.

 

Reason for the Decision

 

As set out in the Officer’s report.

 

Any Alternative Options Considered and Rejected

 

Not applicable.

 

Scrutiny Considerations

 

The Deputy Head of Finance said the following in response to Members’ questions:

 

      i.         Regarding the decarbonisation of the Treasury Deposit, Officer were discussing with Treasury Management advisors about their expertise. There was increasing information that was available. It was difficult to receive this information on a consistent basis. This was a developing area rather than a definitive way forward. Would keep the Committee advised going forward.

    ii.         There were appropriate reasons to lend money to other Local Authorities. Would liaise with the Chief Financial Officer about a better way of communicating better to the public about loans being repaid.

   iii.         In response to why the net revenue was a minus number, the Officer stated that this was because net financing costs were currently negative as income the Council received in respect of its investing activities exceeded the cost associated with the financing of capital expenditure

  iv.         When the Council compared its commercial income to its net revenue stream, net commercial income was equal to 52% of the net revenue stream. This reflected the assets held by the Council which generated commercial income, including car parks and investment properties. The outturn percentage was higher than the budgeted figure as the net revenue stream was lower than originally budgeted in 2022/23.

    v.         The ‘Authorised Limit’ of £450 million was based on a review of the capital programme and an assessment of what borrowing would be required to deliver the upcoming capital programme. The figure was subject to regular review.

  vi.         The Operational boundary was determined based on a review of the capital programme and an assessment of what borrowing would be required to deliver the upcoming capital programme. The figure was subject to regular review. The difference with the authorised limit was that the operational boundary could be exceeded in extraordinary circumstances and usually for a short period of time only. The authorised limit cannot be exceeded.

 vii.         The upper limit fixed variable splits the value of the interest receivable/payable on the Council’s investments and borrowing according to whether the underlying instrument had a fixed or variable rate of interest

The Committee unanimously endorsed the recommendations.

 

The Executive Councillor approved the recommendations.

 

Conflicts of Interest Declared by the Executive Councillor (and any Dispensations Granted)

 

No conflicts of interest were declared by the Executive Councillor.