Agenda item

To consider and receive the report for information

DECISION:

To accept the report for information.

The Investment Manager presented a report on the actual results of the Council's treasury management during 2023/24 to date, against the Treasury Management Strategy for 2023/24 as approved by the Full Council in March 2023. It was noted that the strategy required the Investment Manager to report on the indicators on a quarterly basis – this was the first report of its kind.

It was reported that the year had been very busy and prosperous for the Council's treasury management activity as the activity remained within the limits imposed. It was confirmed that there was no failure to pay back by the institutions the Council had invested money with and that interest rates had been high and generated substantial interest income.
 

On 30 June 2023, the Council was in a very strong position with net investments, which had resulted from a high level of investments and operational capital. This included Ambition Board and Pension Fund funding. 

In the context of investments, it was reported that lending activity had been very quiet in the period with only loan repayments taking place. It was reiterated that the Council had continued to invest with Banks and Building Societies, Money Market Funds, Pooled Funds, Local Authorities, and the Debt Management Office which was now consistent with the type of investments the Fund had operated for a number of years.

Reference was made to the Liabilities Benchmark, and it was noted that it was an important tool to consider whether the Council is likely to be a long-term lender or long-term investor in the future, and therefore shaped the strategic focus and honed decisions. It was clarified that the Council expected to continue lending above its liability benchmark up to 2025 and this was because the Council held reserves with cash flow to date, having been lower than the assumptions made when the money was borrowed.

When looking to the future, it was noted that, based on current projections, borrowing was not necessary in the long term, but may be necessary in the short term to near future. It was noted that all activities had fully complied with the CIPFA code of practice apart from a one indicator (Interest Rate Disclosure). It was explained that this indicator was set in the low interest conditions of March 2023 and therefore it was reasonable that the amounts were so different.
 

Gratitude was expressed for the report.

During the ensuing discussion, the following observations were made by members:

·         Liabilities Benchmark figure / Column 31.3.24 (Objective) / Less: Balance Sheet Resources needed to be amended from 177.1 to 117.1.

·         The Council's situation would have been much worse had it not been for the reserves

In response to a question regarding the 1% Interest Rate Disclosure indicator, and if it was the Council who set the 1%, it was agreed that a better indicator needed to be looked at, however at the moment they had to report on the current indicator.

RESOLVED:  To accept the report for information.