Issue - meetings

The Leader’s Portfolio

To consider report FIN/575 of the Head of Corporate Finance, which was referred to the meeting of the Overview and Scrutiny Commission held on 4 July 2022.

RESOLVED

That the Cabinet approves the actual 2021/22 Prudential and Treasury Indicators as set out in report FIN/575 and notes the Annual Treasury Management Report for 2021/22.

Reasons for the Recommendations

The Council’s financial regulations, in accordance with the CIPFA Code of Practice for Treasury Management, requires an annual review following the end of the year describing the activity compared to the Strategy.  This report complies with these requirements.     

The Leader of the Council presented report FIN/575 of the Head of Corporate Finance on the Treasury Management Outturn for 2021/2022. The CIPFA Code of Practice for Treasury Management recommends that Councillors be updated on treasury management activities regularly and the report ensured the Council was implementing best practice in accordance with the Code.  The report provided details of the outturn position for treasury activities and highlighted compliance with the Council’s policies previously approved by Councillors.

The Cabinet was informed that as of 31 March the Council held £129m of investments.  Of this, only £76m belonged to the Council all of which was committed and held within its reserves. It was noted therefore that any new capital expenditure would need to be funded through borrowing. The remaining £53m was working capital that the Council holds including business rates that the Council would have pay back to the Government by the end of the current year.  The Council had also borrowed £260,325,000 in 2012 for the HRA self-financing of which the Council was due to start paying back at the end of this year, with the future strategies detailing how this would be achieved.

Councillor T Belben presented the Overview and Scrutiny Commission’s comments on the report to the Cabinet following consideration of the matter at its meeting on 4 July 2022, which included raising queries on the appendices and noting that there was an error within the Non-Treasury Investment table concerning the valuations for Ashdown House and Atlantic House and that they had been reversed.

RESOLVED

That the Cabinet approved the actual 2021/22 Prudential and Treasury Indicators as set out in report FIN/575 and notes the Annual Treasury Management Report for 2021/22.

Reasons for the Recommendations

The Council’s financial regulations, in accordance with the CIPFA Code of Practice for Treasury Management, requires an annual review following the end of the year describing the activity compared to the Strategy.  This report complies with these requirements.       

To consider report FIN/575 of the Head of Corporate Finance.

The Commission considered report FIN/575 with the Leader of the Council, Head of Corporate Finance and the Chief Accountant. The CIPFA Code of Practice for Treasury Management recommends that Councillors be updated on treasury management activities regularly and the report ensured the Council was implementing best practice in accordance with the Code.  The report provided details of the outturn position for treasury activities and highlighted compliance with the Council’s policies previously approved by Councillors.

During the discussion with the Leader of the Council, Head of Corporate Finance and Chief Accountant, the following points were expressed:

·       Clarification was offered on the maturity structure together with number of detailed holdings. It was confirmed most were on fixed rate of return, with only the Money Market Funds and Strategic Fund being variable rate.

·       Confirmation that there was an error within the Non-Treasury Investment table concerning the valuations for Ashdown House and Atlantic House were reversed. This resulted that the rate of return was incorrect for these two properties and should have read 7.96% for Atlantic House and 7.52% for Ashdown House.  The Treasury report show only those investment properties that we purchased for that purpose. 

·       Recognition that the current investment properties were valued on an annual basis and provided a good rate of return. It was felt that it would be beneficial to receive a detailed holdings table of commercial properties to allow further analysis to take place

·       Explanations were sought and obtained on the details provided within appendices.

RESOLVED

That the Commission noted the report and requested that the views expressed during the debate, were fed back to the Cabinet through the Commission’s Comment sheet.