Issue - meetings

To submit a report by the Head of Function (Resources)/Section 151 Officer.

It was resolved to approve the Treasury Management mid-year review report 2018/19 and to forward the report to the Full Council without further comment.

The report of the Head of Function (Resources)/Section 151 Officer incorporating a review of the Treasury Management position and activity mid-way through the 2018/19 financial year was presented for the Executive’s consideration.

The Portfolio Member for Finance reported that the mid-year review report on the Council’s Treasury Management activities has been prepared in accordance with the requirements of CIPFA’s Code of Practice on Treasury Management; the report will also be presented to the Full Council under the terms of the Council’s Constitution.

The Head of Function (Resources)/Section 151 Officer said that the report had been considered and accepted without additional comment by the Audit and Governance Committee. The main points can be summarised as follows –

•           The Council held £6.089m of investments as at 30 September, 2018 details of which are contained in Appendix 4 to the report. Performance for the year to date in terms of investment return at £0.023m exceeds the budgeted return of £0.017m the reason being the increase in bank rate from 0.5% to 0.75% in August, 2018.

•           The projected Capital Financing requirement (CFR) for 2018/19 in £142m. This denotes the Council’s underlying need to borrow in order to fund capital expenditure and is financed both through external borrowing - £125.6m and internal borrowing - £16.4m made up of the Council’s cash balances. In January, 2019 borrowing from the PWLB (£5m) matured and was repaid along with borrowing from North Yorkshire County Council (also £5m); this provided an opportunity to re-structure the Council’s borrowings leading to borrowing of £15m consisting of £5m to make the repayment to PWLB; £5m to repay North Yorkshire County Council and £5m to re-balance the proportion of internal borrowing compared to external borrowing in order to increase the Council’s cash balances.

•           The Council sets Prudential Indicators as part of its Treasury Management Strategy for the year ahead; these are designed to control the Council’s borrowing ensuring that it does not borrow to a level that is unsustainable in the long-term. The indicators are referred to in section 7 of the report. It is not envisaged that there will be any difficulties in complying with the indicators in the current year. Table 7.5.1 of the report shows the balance between external and internal borrowing with the total sum of internal borrowing having been revised down from the original estimate of £27.467m to £16.409m as a result of reduced capital expenditure and the re-structuring referred to previously.

It was resolved to approve the Treasury Management mid-year review report 2018/19 and to forward the report to the Full Council without further comment.