Agenda item

To receive the report for information.

DECISION:

To accept the report for information

Submitted, for information, a report highlighting the Council's actual Treasury Management activity during the current financial year. At a meeting of the Full Council in March 2023, the Treasury Management Strategy had been approved for 2023/24. It was highlighted that, during the six months between 1 April and 30 September 2023, the Council’s borrowing activity had remained within the limits originally set. It was reiterated that it was estimated that the Council's actual investment income exceeded the expected income in the 2023/24 budget.

It was explained, in the external context that it had been a busy and prosperous time for the Council’s treasury management activity. No organisation with which the Council had invested money had defaulted, and high interest rates had produced significant interest income. Reference was made to the economic background, and it was noted, in the local context, that the situation on 30 September 2023 was very strong with the Council in a net investment position as a result of the high level of investments and operational capital that the Council had, including the money of the Ambition Board and the Pension Fund. 

In the context of the Council's borrowing position, it was reported that there had been no movement in the level of borrowing during the past six months with the Council continuing with its strategy of using internal resources before borrowing. It was added that the cost of borrowing had raised significantly recently due to the market terms and therefore the Council was in a fortunate situation.

In terms of investment activity, reference was made to the type of investments made, which, as usual, included banks and building societies, local authorities, financial market funds, Debt Management Office and pooled funds. It was reported that the basic bank rate had risen to 5.25% in the period and the returns had been high.
It was added that the Council had invested 13m in pooled funds, which was an additional £3m since submitting the latest information. It was noted that the pooled funds were mid/long-term investments which brought in a very good income level, and with the Council's finance levels healthy, it was highlighted that the decision had been made for further investment in these funds, on the advice of Arlingclose.

It was confirmed that treasury management activities undertaken during the period fully complied with the CIPFA Code of Practice as well as the Treasury Management Strategy that highlights robust management of the money, although there was no compliance with the Interest Rate Disclosure indicator. It was explained that the indicator had been set during the lower interest rates of February 2023 therefore it was reasonable that the amounts were so different. Discussions would be held with Arlingclose to set a different indicator for 2024/25.  Attention was drawn to the Liability Benchmark presentation, which was an important tool to establish whether the Council was likely to be a long-term borrower or long-term investor in future, and therefore shaped the strategic focus and decisions.

Gratitude was expressed for the report.

RESOLVED:

To accept the report for information