(NOTE: A copy of the report that was considered by the Strategy and Resources Committee on 1 September 2020 is attached).
Council considered the Treasury Management Annual report for 2019/20 to the Strategy and Resources Committee on 1 September 2020 (circulated previously)
Report by the Head of Resources to the Strategy and Resources Committee on 1st September 2020 (attached) and minute extract of the Strategy and Resources Committee held on 1st September 2020 (attached).
The Committee considered a report to the Strategy and Resources Committee on 1st September 2020 by the Head of Resources together with a minute extract (circulated previously) regarding the Annual Treasury Management Report 2019/20.
The Head of Resources advised that the report had already been subject to consideration by the Strategy and Resources Committee on 1st September 2020.
He highlighted the following points to the Committee:
· This report was one of three mandatory reports produced each year: annual strategy at beginning of year, mid-year report in November outlining performance against the strategy and an annual report which sets out how the Council had actually performed in the year.
· NDC’s strategy for treasury management was in the order of (1) Security,(2) Liquidity of the money and how easily accessible and (3) the Yield (return) on any investment made.
· ‘Spare’ cash was utilised for ‘internal borrowing’ as was cheaper to borrow from own reserves than external borrowing.
· Borrowing need for 2019/20 was £4.746million. External borrowing was only £1.25million, with the difference being borrowed internally from cash reserves. External borrowing was at £1.25m at the start and end of 2019/20.
· Net investments for the Council of £15.9million being held at 31st March 2020.
· During 2019-20 year the Council made no material non-treasury investments in property with a view of generating an income stream. Many Authorities had recently done this and it had resulted in a lower income than hoped for with the effects of the pandemic on commercial businesses who would have looked to occupy such premises.
· Investment Outturn position was shown in section 4.6and the investment activity for the year conformed to the approved strategy and the Council had no liquidity difficulties. The Authority had around £650,000 more in cash balances at 31 March 2020 than at the same time in the previous financial year.
· The Council earned £143,000 of interest income on its investments in 2019-20 against the budgeted interest of £70,000.
RESOLVED, that the decisions and recommendations of the Strategy and Resources Committee be endorsed.
Report by Chief Financial Officer (attached).
The Committee considered a report by the Head of Resources (circulated previously) regarding the Treasury Management Annual Report 2019/20.
The Accountancy Services Manager highlighted the following:
· This report detailed how the Council had performed for the year 2019/20.
· The treasury management strategy was based on the following order; 1) security of funds, 2) liquidity of funds and, 3) the yield and return of investments.
· With current bank rates being very low it was cheaper for us to borrow against our own funds.
· The underlying need to borrow was called the Capital Financing Requirement (CFR). Table 4.2 of the report detailed the Council’s actual CFR, which for 2019/20 was £4.746 million, our external borrowing was £1.250 million. We internally borrowed £3.000 million from our internal reserves and balances.
· We started and ended the year with the same external borrowing figure of £1.250 million.
· Table at 4.3 detailed the level of investment made, which was £17.100 million, as at 31st March 2020 this figure netted off was £15.900 million.
· All investments made were short term and were for less than a year and the Council made no material non-treasury investments in property with a view of generating an income stream.
· The Investment Outturn position was shown at paragraph 4.6; and as Chief Financial Officer, Jon Triggs had confirmed that the investment activity for the year 2019/20 conformed to the approved strategy and the Council had no liquidity difficulties.