Issue - meetings

RECOMMENDED TO COUNCIL that:

(a)    the Minimum Revenue Provision (MRP) change for 2023/24 set out in paragraphs 16-32 of the report be approved; and

(b)    the Treasury Management Strategy 2024/25 set out at Appendix 4 of the report be approved.

Councillor M Andrews presented the report and recommendations as set out on the agenda.

The proposal was seconded by Councillor E Connolly.

Council moved to a vote where the motion as follows was carried.

RESOLVED that:-

(a)       the Minimum Revenue Provision (MRP) change for 2023/24 set out in paragraphs 16-32 of the report be approved; and

(b)       the Treasury Management Strategy 2024/25 set out at Appendix 4 of the report be approved.

Voting: Nem.Con.

This report sets out the monitoring of the Council’s Treasury Management function for the period 1 April 2023 to 31 December 2023. A surplus of £650k will be achieved due to the increase in interest rates.

The report also recommends changes to the Council current MRP Policy for 2023/24 set out in detail from paragraph 16-32.

The Treasury Management Strategy 2024/25 is included as an appendix to this report. Key changes to the strategy have been set out in paragraphs 33-34.

The Assistant Chief Financial Officer (CFO) 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 first part of the report covered the monitoring of the Council’s Treasury Management function for the period 1 April 2023 to 31 December 2023. It was noted that a surplus of £650k would be achieved due to the increase in interest rates. The second part of the report at paragraphs 16 to 32 explained the reasons for considering changes to the Council’s current approach to the repayment of debt, known as the Minimum Revenue Provision (MRP). Following a review of the MRP policy it was recommended to change the calculation method to an annuity basis, as this provided a more suitable and cost effective strategy while remaining prudent and complaint with statutory guidance. The final part of the report outlined the main changes to the annual Treasury Management Strategy for 2024/25, which included the proposed changes to the MRP.

The Portfolio Holder for Finance explained that he was assured by a number of factors around the changes to the MRP, including the experience in this field of Link Group who had undertaken the MRP review, the involvement of internal and external audit, and the fact that the annuity method was used by 60% of councils and had received positive feedback at a recent Local Government Association conference.

The Assistant CFO responded to questions from the Committee on the MRP. He confirmed that this was all asset backed debt, some of which was historic. The key advantages/disadvantages of the changes in policy were set out in the report. It was noted that the Council may wish to consider providing an additional amount of MRP over and above the prudent amount, known as voluntary revenue provision (VRP). It was explained that the current method for calculating MRP had been inherited from previous councils pre 2019. The Council was required to periodically review its approach and this had resulted in options being put forward which best suited BCP Council and accorded with the statutory guidance.

RECOMMENDED TO COUNCIL that

a)    the Minimum Revenue Provision (MRP) change for 2023/24 set out in paragraphs 16-32 of the report be approved; and

b)    the Treasury Management Strategy 2024/25 set out at Appendix 4 of the report be approved.

RESOLVED that the reported activity of the Treasury Management function for the period ending 31 December 2023 be noted.

Voting: Unanimous