Agenda item

The Finance Manager, updated the committee on the Treasury Management activities which had taken place during 2021/22 to date and the Treasury Strategy which was recommended for adoption for 2022/23. The strategy in 2021/22 had been to limit investments in third parties which would limit the Council’s exposure to counterparty risk and to continue to take advantage of lower interest rates for borrowing which had generated a surplus within treasury management returns of more than £26m since 2015/16 and had reduced the impact of government cuts. The Council’s budget for 2022/23 included an allowance to lock in all anticipated financing requirements at fixed interest rates that were higher than the current PWLB rates, but in line with Link’s forecast, in order to ensure a robust Treasury Management strategy. In respect of external financing requirements, the Council was complying with all prudential indicators and the Council continued to ensure the strategy was set within the parameters of the CIPFA code of practice. 

A revised Code had been published by CIPFA in December 2021 with immediate effect, although councils may defer introducing the requirements until 2023/24 as part of a soft launch, and guidance was currently awaited. The Group Accountant noted that the Treasury Management Activities for 2021/22 which were set out in the report, together with the Treasury Policy Statement. Cabinet and Full Council approval would be sought for the full Strategy 2022/2023 and in relation to borrowing and prudential indicators.

In relation to Treasury Management for the financial year 2021/2022, up to December 2021, the treasury portfolio position for 31 March 2021 up to December 2021showed overall indebtedness of £226.2m.  Base rates continued to increase from 0.01% up to 0.25% and it was anticipated they would continue to increase in 2022/23.  No rescheduling of debt had taken place during 2021/22 and a mix of temporary and long term borrowing has previously been approved and would involve short term investments in the Money Market Fund, Lloyds Banking Group and the Debt Management Office. During 2021/22 there had been one lease drawdown.

Members had attended a training session prior to the Audit Committee and that Treasury Strategy guidance and the accounting standards and framework had been covered during this session and it referred to the new CIPFA Code and the Treasury Management Public Services Code with guidance notes being expected in January.

Borrowing strategy remained consistent and had took advantage of low interest rates on short term borrowing and locking in long term borrowing after consultation with external advisors and was a continuation of the strategy from 2021/22 and included emphasis on the security of principal.

Upon being put to the vote, it was:

RESOLVED: that

a)    The Treasury Management activities for the first half of the year be noted;

b)   The Treasury Management Policy Statement be noted; and

c)    By way of vote, that Cabinet and Full Council approve the Treasury Strategy, including the Annual Investment Strategy for 2022/23 together with the associated Treasury Prudential Indicators, sources of borrowing and the Minimum Revenue Provision Statement, which will apply from 2021/22 onwards.