Report by the Director of Resources and Deputy Chief Executive to the Strategy and Resources Committee on 3 July 2023 (attached).

Council considered the Annual Treasury Management report for 2022/23 to the Strategy and Resources Committee on 3^rd July 2023 (circulated previously).

(a)  Report of the Policy DevelopmentCommittee

Councillor L. Spear, Chair of the Policy Development Committee presented the Committee’s report on the Annual Treasury management report for 2022/23 to the Policy Development Committee on 6^th July 2023 (circulated previously).

(b)  Report of meeting of the Strategy and ResourcesCommittee

Councillor Roome, Chair of the Strategy and Resources Committee reported the recommendations of the Strategy and Resources Committee on the Annual Treasury management report for 2022/23 (circulated previously).

It was moved by Councillor Roome and seconded by Councillor Worden “that minute 17 of the report of the Strategy and Resources Committee held on 3^rd July 2023 regarding the Annual Treasury Management report for 2023/23 be adopted.”

RESOLVED that minute 17 of the report of the Strategy and Resources Committee held on 3^rd July 2023 regarding the Annual Treasury Management report for 2022/23 be adopted.

Council passed on their best wishes to Councillor Prowse on his wedding anniversary and to Councillor Wilkinson who was celebrating a very special birthday.

Report by Director of Resources and Deputy Chief Executive to the Strategy and Resources Committee on 3^rd July 2023 (attached), and

(a) Minute Extract of Strategy and Resources Committee on 3rd July 2023 (to follow).

The Committee considered a report by the Director of Resources and Deputy Chief Executive (circulated previously) regarding the Annual Treasury Management report 2022/23 together with Minute Extract of Strategy and Resources on 3^rd July 2023 (circulated previously).

The Head of Governance highlighted the following:

·         This report outlined the actual prudential and treasury indicators for 2022/23.

·         The Council’s Capital Financial Requirement (CFR) for the year was detailed in the table on page 83 of the report and was circa £24m which included the finance leasing of vehicles.

·         A large capital programme during 2021/22 including the new Leisure Centre and purchase of Green Lanes Shopping Centre resulted in an increased CFR of circa £17m for that financial year. For 2022/23 a further £2.2m was added to our CFR which included the completion of the Leisure Centre build.

·         In relation to borrowing outturn, the 2022/23 original budget prudently assumed a level of new external borrowing would be required to fund approved capital expenditure. As a result of lower spend and less external borrowing taken on, interest paid was much lower at £60,363 for the year, with the remaining budget of £275,000 now placed into a new Treasury Management reserve to help mitigate against higher borrowing costs as we move into the 2023/24 financial year.

·         The average borrowing rate for year on borrowing loans was 2.01%.

·         In terms of investments the increase in bank rate had assisted to improve investment returns for the year with total interest of £290,000 received compared to the original budget £35,000.

·         The average rate of return on investment was 1.5% compared to the bench mark of 2.2% which closely tracked to the bank rate.

In response to questions, the Director of Resources and Deputy Chief Executive and the Head of Governance advised the following:

·         The interest rates were benchmarked at a rate of 2.2% as the interest rates for the first half of the last financial year were low. The Council held some funds for liquidity purposes but these attracted a lower interest rate.

·         The mid-year treasury report would be the best time to review the treasury strategy for the current year in terms of investment options.

·         Current investments had been placed at a rate above 5% but this report only went up as far as 31^st March 2023. The level of debt against the Councils assets was quite low for internal borrowing.

·         The Council had fixed assets of £128m and that was a positive asset base for the size of the authority.

RESOLVED, that the decisions and recommendations of the Strategy and Resources Committee be endorsed.

Report by Director of Resources and Deputy Chief Executive (attached)

The Committee considered a report by the Director of Resources and Deputy Chief Executive (circulated previously) regarding the Annual Treasury Management report 2022/23.

The Head of Governance highlighted the following:

·       This report outlined the actual prudential and treasury indicators for 2022/23.

·       The Council’s Capital Financial Requirement (CFR) for the year was detailed in the table on page 83 of the report and was circa £24m which included the finance leasing of vehicles.

·       A large capital programme during 2021/22 including the new Leisure Centre and purchase of Green Lanes Shopping Centre resulted in an increased CFR of circa £17m for that financial year. For 2022/23 a further £2.2m was added to our CFR which included the completion of the Leisure Centre build.

·       In relation to borrowing outturn, the 2022/23 original budget prudently assumed a level of new external borrowing would be required to fund approved capital expenditure. As a result of lower spend and less external borrowing taken on, interest paid was much lower at £60,363 for the year, with the remaining budget of £275,000 now placed into a new Treasury Management reserve to help mitigate against higher borrowing costs as we move into the 2023/24 financial year.

·       The average borrowing rate for year on borrowing loans was 2.01%.

·       In terms of investments the increase in bank rate had assisted to improve investment returns for the year with total interest of £290,000 received compared to the original budget £35,000.

·       The average rate of return on investment was 1.5% compared to the bench mark of 2.2% which closely tracked to the bank rate.

In response to a question, the Head of Governance advised the following:

·       In terms of borrowing from internal reserves. There would have been a cost to carry as borrowing was much higher than the Council would receive in terms of interest.  This decision had been made following advice received from its treasury advisors.

·       Internal and external borrowing would be kept under review.

RECOMMENDED:

(a)  That the annual treasury management report for 2022/23 be noted;

(b)  That the actual 2022/23 prudential and treasury indicators be approved.