Issue - meetings

This report sets out the monitoring of the Council’s Treasury Management function for the period 1 April 2020 to 31 March 2021.

A surplus of £18k has been achieved through a reduced need to carry out temporary borrowing due to high cash balances generated from funding paid in advance associated with the government’s response to the pandemic.

The report also sets out the Quarter One performance for 2021/22 which forecasts an underspend of £171k due to a lower requirement for temporary borrowing.

Further to the standard update the reports seeks approval to a minor adjustment to the Councils minimum revenue provision policy as well as seeking endorsement to increase our borrowing head room in line with the proposal set out in the financial strategy supporting the proposed 2022/23 budget as endorsed by Cabinet.

Matt Filmer, Acting Assistant Chief Financial Officer presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'B' to these Minutes in the Minute Book.

The Committee was advised that it was a requirement under the Chartered Institute of Public Finance and Accountancy (CIPFA) Treasury Management Code of Practice that regular monitoring of the Treasury Management function was reported to Members.

Council was required to approve any changes to the prudential indicators based on a recommendation from the Audit & Governance Committee.

This report sets out the monitoring of the Council’s Treasury Management function for the period 1 April 2020 to 31 March 2021.

A surplus of £18k had been achieved through a reduced need to carry out temporary borrowing due to high cash balances generated from funding paid in advance associated with the Government’s response to the pandemic.

The report also set out the Quarter 1 performance for 2021/22 which forecasts an underspend of £171k due to a lower requirement for temporary borrowing.

Members were informed that further to the standard update the report sought approval to a minor adjustment to the Council’s minimum revenue provision policy as well as seeking endorsement to increase the Council’s borrowing head room in line with the proposal set out in the financial strategy supporting the proposed 2022/23 budget as endorsed by Cabinet.

The Acting Assistant Chief Financial Officer reported on the latest economic position.  He reported that interest rates remain historically low at 0.1% with the Council’s Treasury Management consultants not expecting an interest rate increase until late 2023.  The Committee was advised that inflation was the big topic in terms of the global economies and potential risks.  The Acting Assistant Chief Financial Officer reported that inflation as at the end of June was 2.5% with the Bank of England’s target being 2%.  He explained that the inflation levels were causing a split between experts with some taking the view it related to the unlocking of Covid restrictions and the economy opening up with others viewing it as a more engrained inflation rate.  The Committee was advised that this created a risk in particular for Council services with costs increasing and it was possible that the Bank of England may increase interest rates sooner to control inflation. 

The Acting Assistant Chief Financial Officer reported on the treasury management outturn for 2021 as set out in the report. He explained that the underspend was mainly due to the Council having received significant cash balances in terms of Government support and equally where the Council was distributing business grants.  The Committee was informed that borrowing at the end of March 2021 was just over £194m and at year end investments were just over £56m. 

The Committee was updated on the performance for Quarter 1 2021/22 with an underspend of £171,000 which was due to significant Government support as referred to earlier in the meeting.  The Acting Assistant Chief Financial Officer reported on the level  ...  view the full minutes text for item 15