Agenda item

To submit, for information, the report of the Head of Finance on the Council’s actual borrowing and investment during the current financial year.

The background and context of the report on the current year's treasury management activity was set out by the Investment Manager.

The Head of Finance Department confirmed that no bank with which the Council had invested was in danger and that the Council's money was safe. He highlighted that investments could vary and that the Council weighed up the flexibility of short term investment with long term investments that attract a higher rate of interest.

In response to a question from a member about the £2.2m reduction in loans since 31 March 2017, the Investment Manager stated that the reduction was due to the Council having repaid historic loans and using cash flow, rather than borrowing, in accordance with the Council's current policy of not borrowing more money.

The Head of Finance Department stated that a briefing meeting would be held on 24 January 2018 by Arlingclose, the Council's Treasury Management Consultants, for Committee members. He stated that it would be a golden opportunity to discuss and explain the Council's Treasury Management Strategy for 2018/19.

In response to an enquiry by a member about the shift in internal short term loans and short term financing from £3m to £1m since 31 March 2018, the Head of Finance Department stated that the Council was hopeful that short term financing could take place internally. He explained that the Chief Executive and Cabinet Member for Finance would present the Assets Strategy to the Committee, the Cabinet and the Full Council. It would be an Assets Management Strategy that would identify future borrowing needs. He stated that the shift showed that some short term loans had come to an end.

A member enquired as to who was responsible for setting the rates of the Public Work Loans Board (PWLB). In response, the Head of Finance Department noted that PWLB came under the Westminster Government but was a separate agency. He added that the Treasury was considering stricter rules since councils in England had become commercialised and were borrowing to the detriment of the country, but that this power had not been devolved to Welsh councils.

In response to a question by a member in relation to the Council's levels of borrowing, the Head of Finance Department highlighted the debt restrictions and explained that he was authorised to invest up to £180m during 2017/18, i.e. the operational margin, with an authoritative margin of £190m which required the Committee's approval. He explained that the Council was borrowing £109m and was currently self-borrowing £51m, and that the choice of when to borrow was a strategic one. He noted that the amount the Council needed to borrow depended on the Assets Strategy.

In response to an enquiry by a member about PFI (Private Finance Initiative), the Head of Finance Department stated that he did not encourage PFIs for a number of reasons, and that costs would be incurred if a decision was made to revoke them. One historical project had been funded in this way in Gwynedd.

RESOLVED to accept the report for information.