Issue - meetings

Matter for Decision

 

The council has adopted The Chartered Institute of Public Finance and Accountancy (CIPFA) Code of Practice on Treasury Management (Revised 2021).

 

This half-year report has been prepared in accordance with the Code and covers the following:

 

·      An economic update for the first half of the 2023/24 financial year;

·      A review of the Treasury Management Strategy Statement and Annual Investment Strategy;

·      The Council’s capital expenditure, as set out in the Capital Strategy, and prudential indicators;

·      A review of the Council’s investment portfolio for 2023/24;

·      A review of the Council’s borrowing strategy for 2023/24; and

·      A review of compliance with Treasury and Prudential Limits for 2023/24.

Cash and investment balances as at 29 September were £142 million. The balance is forecast to gradually reduce over the remainder of the year as existing balances are used to fund General Fund (GF) and Housing Revenue Account (HRA) capital expenditure.

 

Interest receipts for the year are projected at £6,271,000 which is £3,954,000 above the original budget. Interest receipts are forecast higher than last year due mainly to increases in investment rates and higher cash balances being held for longer periods than expected.

 

Decisions of Executive Councillor for Finance and Resources

 

The Executive Councillor is asked to:

 

Recommend to Council the council’s estimated Prudential and Treasury Indicators for 2023/24 to 2026/27 (Appendix A).

 

Note that no changes have been made to the counterparty list (Appendix B).

 

Reason for the Decision

 

As set out in the Officer’s report.

 

Any Alternative Options Considered and Rejected

 

Not applicable.

 

Scrutiny Considerations

 

The Committee received a report from the Deputy Chief Finance Officer.

 

The Deputy Chief Finance Officer and the Chief Finance Officer said the following in response to Members’ questions:

      i.         Increase in borrowing reflected the Housing Revenue Account (HRA) plans to continue to build new homes, the MTFS 30-year business plan and the upcoming draw down of loan financing in respect of the redevelopment of Park Street,

    ii.         The 30-year HRA business plan had considered the interest expense in undertaking borrowing.

   iii.         If additional funding were available from Government, this would affect the Council’s ability to offer different types of housing.

  iv.         There was no formal arrangement within the 30-year plan to repay the HRA borrowing.

    v.         The previously assumed HRA business plan assumed there would be re-payment and that money was put aside to be put towards the re-payment of the initial self-financing loans. As finances had become tighter it was more difficult to do so. The business plan funds the interest costs. When loans come due, they would not be re-paid but refinanced. The Council retains the housing assets to back up the HRA loans held.

  vi.         Regarding lending to other local authorities, the largest loan amount outstanding was £6 million. There were several similar amounts to other local authorities. There were approximately 10 local authorities.

 vii.         Regarding de-carbonising investments, would work with investment funds going forward to provide clear information.

 

The Scrutiny Committee unanimously approved the recommendations.

 

The Executive Councillor for Finance and Resources 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.