The Committee considered a report by the Head of Governance (circulated previously) regarding Mid-Year Treasury Management 2024/25.

The Head of Governance highlighted the following:

·         The Treasury Management Strategy Statement (TMSS) for 2024/25 was approved at full Council on 21 February 2024.

·         The revised Capital Financing Requirement (CFR) was around £37million.  It was projected that the CFR would be funded from £18million external borrowing, £5million financial leases, £14million internal borrowing from reserves.

·         The underlying TMSS approved previously required revision in the light of economic and operational movements during the year.The proposed changes were set out as follows:

·         The change to the upper limit for borrowing under 12 months would allow greater flexibility for short-term borrowing, given the current interest rate forecast.

·         The Council held £6.2million of investments as at 30 September 2024 (£1.8million at 31 March 2024) and the investment portfolio yield for the first six months of the year was 4.72% against the benchmark 7 day average SONIA rate of 5.12%.

In response to questions about the change in the CFR, the Head of Governance explained that the original TMSS had been approved in February 2024, with two capital schemes approved at a later date, which had a borrowing need.  The Head of Governance confirmed that the overall authorised borrowing limit remained at £40million.

The Director of Resources and Deputy Chief Executive added that the Council hoped to maximise its longer-term borrowing when interest rates drop.  Appendix A of the report detailed an economic update from the Council’s external treasury advisors, Link Group.

RECOMMENDED to full Council:

(a)  That changes to the prudential indicators be approved; and

(b)  That the report and treasury activity be noted

The Committee considered a report by the Head of Governance (circulated previously) regarding the Mid-Year Treasury Management Report 2024/25 together with the minute extract of the Strategy and Resources Committee held on 4 November 2024 (circulated previously).

The Head of Governance highlighted the following:

·       The Treasury Management Strategy Statement (TMSS) for 2024/25 was approved at full Council on 21 February 2024.

·       The revised Capital Financing Requirement (CFR) was around £37million.  It was projected that the CFR would be funded from £18million external borrowing, £5million financial leases, £14million internal borrowing from reserves.

·       The underlying TMSS approved previously required revision in the light of economic and operational movements during the year.The proposed changes were set out as follows:

·       The change to the upper limit for borrowing under 12 months would allow greater flexibility for short-term borrowing, given the current interest rate forecast.

·       The Council held £6.2million of investments as at 30 September 2024 (£1.8million at 31 March 2024) and the investment portfolio yield for the first six months of the year was 4.72% against the benchmark 7 day average SONIA rate of 5.12%.

In response to questions from the Committee, the Head of Governance advised the following:

·       The table on page 94 of the report detailed the Interest Rate Forecasts. It was anticipated that there would be further cuts in interest rates. The Council would therefore be looking for short term borrowing.

·       It was too soon to know the impact of the US election on the UK economy and our borrowing rates. PWLB rates are linked to UK government gilt yields so we would have to see how the market responds.

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