Agenda item

To receive the 2023/24 Treasury Management Report and the 2024/25 Treasury Management Strategy.

The Finance Manager and the Group Accountant presented the 2023/24 Treasury Management Update Report and 2024/25 Treasury Management Statement.

Members had received a training session which gave the background to treasury management.

The report updated Members on treasury management activities during 2023/24 and detailed the Treasury Management Strategy recommended to be adopted for 2024/25.  During the year, the Council had met the requirements of both the CIPFA Code of Practice on Treasury Management and the CIPFA Prudential Code for Capital Finance in Local Authorities.  It set out the Council’s treasury portfolio borrowing and indebtedness and the latest financial projections which, as well as providing key services and facilities to residents in the Borough, helped to support front line services.  This was in line with the capital plans and the approved capital programme.  Advice was regularly taken from Link who remained mindful of security, liquidity and yield in order be safe and secure when investing.

The Treasury Management Strategy set out the parameters the Council had to abide by.  It highlighted the borrowing required during 2024/25 together with future years, which was in line with the capital programme and investment strategy. At 31 December 2023, borrowing was £350.7m and investments at £29.6m meaning an overall indebtedness of £321.1m.  Market environments had been difficult with interest rates climbing throughout 2023. 

The Council has increased its external financing requirements in recent years to include investment in NuPlace which provides high quality homes for rent from a reliable landlord, mainly at market rent levels and has enabled brownfield sites to be brought back in to use.  The council has also expanded the Property Investment Portfolio (the PIP) to attract and retain jobs for local people and to provide other regeneration benefits for our residents. These investments would bring long term capital growth which would strengthen the Council’s balance sheet as well as generating revenue returns well in excess of the associated loan repayment charges. 

In 2023/24, a number of the Equal Instalment of Principal (EIP) and Annuity PWLB loans had matured and 1 new PWLB loan for £5m had been taken out.  Alongside this, short term borrowing had been used to fund short term cash flow requirements.

The strategy for any investments would be to minimise investments in order to reduce counterparty risk and to reduce net interest costs as longer-term borrowing rates would tend to be greater than the amounts earnt on new investments.  The Council would look to lengthen investment periods, where cash flow permitted, to achieve higher interest rates within acceptable risk parameters.  No new leasing arrangements had been taken out prior to 31 December 2023.

During the debate some Members welcomed the report and recognised the sound financial footing and careful management of risk adopted within the Council.  

RESOLVED to RECOMMEND TO FULL COUNCIL that:

a)    by way of vote, approve the Treasury Strategy 2024/25, including the Annual Investment Strategy, together with the Minimum Revenue Provision Statement, which will apply from 2023/24 onwards and Treasury Management Prudential Indicators; and 2023/24 Treasury Management Update Report and 2024/25 Treasury Management Strategy;

b)   the treasury management activities to 31st December 2023 be noted; and

c)    the Treasury Management Policy Statement be noted.