Agenda item

To present the report of the Director of Function (Resources)/Section 151 Officer.

The report of the Director of Function (Resources)/Section 151 Officer providing an update on the treasury management position as at 30 September 2024 was presented for the committee’s consideration.

The Director of Function (Resources)/Section 151 Officer confirmed that the Council’s Treasury Management position has remained stable and that the Council has adhered to the prudential indicators set in the Treasury Management Strategy Statement for 2024/25. The Council did not enter into any new external borrowing in the period in order to save on interest payable and it has continued to maintain its strategy of using internal borrowing to fund capital expenditure. However, as cash reserves are utilised, the amount of surplus cash reduces thereby reducing the sums available to invest and the level of internal borrowing that can be supported which means that additional external borrowing is likely to be required in future to fund the capital programme. Investment returns to 30 September 2024 have been positive with estimated interest receivable for the full year on the investments active in the period forecast to be £1.322m. Investment performance for the six months to 30 September 2024 is summarised in Table 4 of the report. The Council’s capital position is set out in Table 5 of the report and shows that the capital budget is expected to underspend by £6.550m for the year. Projects that are underspent and the funding which supports them will be carried forward into 2025/26.

In reviewing the report, the committee raised the following matters –

·      The reasons why a loan dating back to 1969 is still payable and whether it would be more advantageous to settle the loan.

·      The income/savings which the installation of solar panels on Council buildings using Salix loan funding is expected to generate once the loans have been fully repaid.

The Director of Function (Resources)/Section 15 Officer advised that the Council does take out long-term loans for various reasons including for infrastructure projects such as new schools and the loan from 1969 may have been for such a purpose. While the loans which the Council has taken out are regularly reviewed early settlement of PWLB loans comes with an early repayment charge which can be higher than any saving made. If the Council does not have the surplus cash to pay off the loan, then it would have to borrow to do so which may be at a higher rate than the original loan. He further advised that as part of meeting the qualifying criteria for a Salix loan, projects have to be supported by a business case which shows the expected saving/income to be made over a period of 10 years or less and that the information with regard to the solar panel projects although not immediately to hand, is available.

The Chair also requested that the format of the treasury management reports be amended to correspond with the Governance and Audit Committee report template and that where feasible the supporting appendices be reduced.

The Director of Function (Resources)/Section 151 Officer clarified that as the treasury management reports are also submitted subsequently to the Executive, for ease of reporting and because of the timescale the Executive template has been used. Quarterly treasury management update reports are also now produced the review of which has been delegated by the Executive to the Portfolio Member for Finance. The quarterly report has been shortened and could be used as a basis for reporting to this committee. The Section 151 Officer suggested that he forward a copy of the Treasury Management update report for Quarter 1 2024/25 to the Chair to see whether its format better meets the needs of this committee.

It was resolved to note the report, the treasury activity, and the prudential indicators as at 30 September 2024 and to forward the report to the Executive without further comment.

Additional actions –

·      The committee to be provided with information about the income/savings which the installation of solar panels on Council buildings using Salix funding is projected to generate.

·      To ask the Director of Function (Resources)/Section 151 Officer to forward a copy of the Quarter 1 2024/25 Treasury Management update report to the Chair for a review of its format.