Issue - meetings

RECOMMENDED that Council: -

(d)          approves the revised prudential indicators set out in table 9 of the report (‘Revised Treasury Indicators: limits to borrowing activity’);

Note – resolution (a), (b), (c) and (e) were determined by the Audit and Governance Committee

This report sets out the monitoring of the Council’s Treasury Management function for the period 1 April 2021 to 31 March 2022.

A surplus of £745k has been achieved through a reduced need to carry out temporary borrowing due to high cash balances generated from funding associated with the government’s response to the pandemic as well as increasing interest rates earnt on the Councils investments.

The report also sets out the Quarter One performance for 2022/23 which forecasts an underspend of £840k due to the increase in interest rates.

Further to the standard update the reports seeks approval to increase our borrowing headroom in line with the proposal set out in the financial strategy supporting the proposed 2022/23 budget as endorsed by Cabinet.

The 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 'A' to these Minutes in the Minute Book.

The report monitored the Council’s Treasury Management function for the period 1 April 2021 to 31 March 2022 and noted the achievement of a surplus of £745K. It was explained that this was a result of a reduced need to carry out temporary borrowing due to high cash balances generated from funding associated with the Government’s response to the pandemic as well as increasing interest rates earnt on the Council’s investments.

The figures were presented within the context of the national economic background and interest rate projections. The Council’s Treasury management performance was explained in terms of borrowing and investments and including particularly an investments summary as at 31 March 2022. The report also set out the Quarter One performance for 2022/23 which forecasted an underspend of £840k.

It was noted that the recent internal audit in January 2022 rated the Treasury Management function as ‘Reasonable’ assurance which meant that there was a sound control framework designed to achieve the service objectives, with key controls being consistently applied.

Appendices to the report provided comparative benchmarking information and specifically listed approved capital schemes and known commitments against the debt ceiling.

The Committee received an update on changing regulations relating to debt and, in the context of those regulations, approval was being sought to increase the Council’s borrowing headroom in line with the proposal set out in the financial strategy to support the proposed 2022/23 budget as endorsed by Cabinet. The recommended new limits to borrowing activity were set out although it was also recommended that borrowing should not be undertaken without the support of a self-funding business case. The views of the Section 151 Officer were set out and considered by the Committee.

There was discussion about the impact of increasing the debt headroom and Members were reminded that in raising the debt ceiling the Council was not agreeing specific schemes but providing itself with flexibility to respond to initiatives that would be brought forward to Council.

There were questions from the Committee about the implications of providing the Council with too much flexibility and about how large budgets were being assessed against potentially significantly large interest rate rises.  It was confirmed that day-to-day financial activity was being carefully monitored in the context of the current inflationary climate.

The Leader of Council responded to questions about the Council’s transformation programme, now within its third year, and referenced significant savings already achieved and in accordance with agreed timetables. The Committee was also reminded that the transformation programme involved mainly revenue expenditure and that the levels of assurance around savings were strong.

There were also specific questions about Central Government metrics for local authorities and the Committee was referred to the provided comparative data as well as receiving reassurance about the provision made for debt repayment. In relation to  ...  view the full minutes text for item 117