Agenda item

To report on the Council’s treasury management activities and Prudential Indicators for 2021/22.

RESOLVED that Cabinet -

a)  notes the Treasury Management performance position for 2021/22; and

b)  approves the Prudential and Treasury Indicators for 2021/22.

Cabinet considered a report of the Corporate Finance & Governance Portfolio Holder (A.7), which reported on the Council’s treasury management activities and Prudential Indicators for 2021/22.

Members were advised that borrowing and investments had been undertaken in accordance with the 2021/22 Annual Treasury Strategy that had been approved by full Council on 13 July 2021, as follows:-

Summary of the Council’s Borrowing Position:

No external borrowing had been undertaken in 2021/22 for either the General Fund (GF) or Housing Revenue Account (HRA).

Summary of the Council’s Investment Position:

Cabinet was informed that the amount of interest earned from investments had decreased during the year due to the bank base rate remaining at 0.10% until 16 December 2021, when it increased to 0.25%, with further increases to 0.50% on 3 February 2022 and 0.75% on 17 March 2022. As most investments were fixed for 6 months at a time, those increases had not offset the majority of the year at 0.10%. Compared to historic interest figures, the 2021/22 return remained low because of the continuing unprecedented low interest rates. Estimated income had been reduced from prior years to £0.067 million, with the outturn figure being £0.065 million as set out in the table above.

It was reported that the Council continued to hold one property within its Commercial Investment Portfolio, which had a balance sheet value at 1 April 2021 of £1.985 million. This ‘book value’ had been increased by the Council’s appointed valuers to £2.108 million at the end of 2021/22. However, this was an ‘accounting’ valuation and not a direct value that could be achieved on the market if it was sold. In-line with the budget, rental income of £0.256 million had been earned on the property in 2021/22 (this figure was higher than in previous years due to the schedule of payments moving back to quarterly rather than monthly with no effect on the overall annualised position).

Members were informed that the Treasury Management limit of £1.000 million that could be held across the Council’s various current accounts on any one day had been exceeded on 1 June 2022, due to the closure of a bank account held with Nat West where they had given no notice of the repayment of the associated credit on the account. As no prior notification of this repayment had been received, no alternative arrangements could be made in time. This had been a one-off event.

Members were made aware that the impact of inflation was expected to grow further in 2022/23 with an expectation that interest rates would continue to rise. Investment income budgets would be reviewed as part of the quarterly Corporate Budget Monitoring and long term financial planning processes.

Acknowledging that good and effective Treasury Management supported the Council in delivery against its corporate goals and objectives and mitigated against risks:-

It was moved by Councillor G V Guglielmi, seconded by Councillor Porter and:-

RESOLVED that Cabinet -

a)  notes the Treasury Management performance position for 2021/22; and

b)  approves the Prudential and Treasury Indicators for 2021/22.