Agenda item

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

The report of the Director of Function (Resources)/Section 151 incorporating the Annual Treasury Management Review for 2019/20 was presented for the Executive’s consideration.

The Portfolio Member for Finance reported that the Council is required by regulations issued under the Local Government Act 2003 to produce an Annual Treasury Management Review of activities and the actual prudential and treasury indicators for 2019/20. The review reflects on the Council’s treasury management activities during the year in the context of the wider economic factors including interest rate performance during the period, continued uncertainty over Brexit and the impact of Covid-19.

The Director of Function (Resources)/Section 151 Officer advised that the Review Report had been considered and accepted by the Audit and Governance Committee at its 1 September, 2020 meeting. From the perspective of the Council’s borrowing strategy, borrowing during the year was within the limits set by the TM Strategy for 2019/20 and was in line with the Prudential Indicators. The Authorised Borrowing Limit (£178m) and the Operational Boundary (£173m) were not breached during the year, with the amount of external debt peaking at £139.2m only, this being attributable to a large underspend on capital projects as outlined in paragraph 3.1 of the report. The Council has implemented an internal borrowing strategy over the last few years meaning that it has used its own cash balances to finance new capital expenditure on the basis that  best value is obtained by avoiding external borrowing when investment rates are below long term borrowing rates (when the cost of borrowing exceeds the returns on investment). As at 31 March, 2019 the Council had used £6.2m of its cash balances to fund capital expenditure but by 31 March, 2020 the Council had borrowed to a level of £2.3m more than required as a result of a £10m loan taken out in March to ensure the Council had sufficient cash going into the Covid-19 emergency. The loan will mature on 18 March, 2021. On the investment side the Council maintained its low risk approach of ensuring ready access to its cash should it be required, keeping to shorter term deposits (whilst retaining the ability to invest out to longer periods) and investing surplus cash by borrowing short term with other local authorities to maximise returns in a secure way.

It was resolved –

•           To note that the outturn figures in the report will remain provisional until the audit of the 2019/20 Statement of Accounts is completed and signed off; any resulting significant adjustments to the figures included in the report will be reported as appropriate.

•           To note the provisional 2019/20 prudential and treasury indicators in the report.

•           To forward the Annual Treasury Management Report for 2019/20 to Full Council without further comment.