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Agenda item

Treasury Management Outturn 2023/24

Purpose

To receive and discuss details of the Council’s Treasury management performance for the period 01 April to 31 March 2024.

 

Recommendation

That Council resolves to:

1.    Note the Treasury Management performance for the period 01 April 2023 to 31 March 2024;

2.    Approve the Treasury Management Outturn Report for 2023/24.

Minutes:

The purpose of the report was to receive and discuss details of the Council’s treasury management performance for the period 01 April 2023 to 31 March 2024.

 

The Deputy Leader and Cabinet Member for Finance, Councillor Evemy, moved the recommendations and made the following points:

 

  • The Audit and Governance Committee had considered the report at its meeting on 23 July 2024.
  • £967,000 more than projected had been received in treasury management income.
  • The Council has no borrowing other that the Council’s Climate Municipal Investment Bonds.
  • The Council’s investments performance was dependent on the baseline interest rate which had been higher in recent years. It was highlighted that the investment performance of the Council was in a similar range of Arlingclose’s other clients.
  • On pooled funds, it was highlighted that these were reviewed with Arlingclose and Council Officers but were held for a longer term to ensure a balance of risk.
  • An arithmetic error raised at the Audit and Governance Committee in Table 1 had been corrected in this report.

 

A question was asked about Section 4.5 on the Community Municipal Investment was fully funded, and the workings of the £0.357M loan through Abundance Investments Limited for the purpose of the investments. The Deputy Chief Executive noted that the repayment would be for investors of the principal investments made and any interest owed. The bond covered the costs of the installation of Solar PV Panels at the Council Offices and the installation of some of the Electric Vehicle Charging Points (EVCPs) operated by the Council.

 

A question was asked regarding the financial advice providers Arlingclose and the optimum timeline to conduct a review of the arrangements and the criteria to do so. The Deputy Chief Executive stated that the selection of financial advisors was subject to a robust procurement process. It was also highlighted that advice from third parties was also sought, but ultimately the S.151 officer would be responsible for the final decision.

 

It was noted that the Council had a £1 million windfall from the investments but also a future requirement to borrow money in the Medium-Term Financial Strategy (MTFS). It was asked if the windfall could be held in a reserve to negate the requirement to borrow within the MTFS. There was also a question regarding the recommendations and whether the Council was approving the report or just noting it. The Deputy Chief Executive noted that the Council was required to receive the Treasury Management Strategy, the mid-year report and the outturn report from officers through the course of the year. Council was recommended to agree to endorse the report and its findings. The Deputy Leader then responded to the earlier question by highlighting that the higher-than-expected return was largely down to prudent budgeting. Whilst it was welcome that a larger return had been received, the Council was required to look at the return at the end of the year to see what funds were required to balance the Council’s budget. The Deputy Chief Executive also clarified that the Council had set aside monies in an earmarked reserve for Treasury Management purposes due to the current statutory override in place on unrealised gains and losses on pooled fund investments. On future borrowing, this was set out in the 2024/25 MTFS which Council approved but that this was being kept under review to ensure the Council did not expend its resources on capital financing.

 

It was noted that the Council did not have any external borrowing for capital investments but instead was using internal borrowing against its own investments to avoid higher interest rates.

 

Councillor Evemy summed up and made the following points:

 

  • Members were reassured regarding Arlingclose’s ability to advise the Council’s on treasury matters.

·         The Council was using its own resources to avoid the higher interest rates for external borrowing, but the future of higher interest rates was not certain.

 

 

 

Supporting documents:

 

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