Issue - meetings

The report sets out the quarter two position for 2024/25 which forecasts an overspend of £2.4m due to higher temporary borrowing required to manage the Council’s overall cash position.

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 'B' to these Minutes in the Minute Book.

The report provided an update on the Quarter Two position for 2024/25 in relation to treasury management activities. It included a summary of the current economic climate, an overview of the estimated performance of the treasury function, an update on the borrowing strategy, investments and compliance with prudential indicators. The Assistant CFO explained that the forecasted overspend of £2.4m was due to higher temporary borrowing required to manage the Council’s overall cash position. He highlighted that a new restructure loan would result in the saving of interest on a cash basis of £19.2 million.

The CFO and Assistant CFO responded to questions about the potential impact of the Chancellor’s national budget due on 30 October 2024. It was agreed to include a section on the national budget in the next quarterly report. Members also asked about the impact of the Dedicated Schools Grant (DSG). As reported to Council on 15 October it was noted that expenditure within the high needs budget continued to exceed the government grant made available as part of the DSG, with the total funding forecast now £44.5m more than the grant. This had a significant impact on cashflow forecast. Other considerations were noted, including that interest rates had not reduced at the rate expected.

In response to questions around investment performance and ethical considerations, the Assistant CFO explained the robust approach taken in assessing and managing risk in relation to investments. This was set out in the Investment Strategy which formed part of the Treasury Management Strategy considered by full Council as part of its annual budget setting. He outlined the process which the Council was required to follow when considering investments, including ethical investing. In all cases the Council had to adopt the principles of security, liquidity and yield.

RESOLVED that the Committee notes the reported activity of the Treasury Management function for April to September 2024.