Issue - meetings

To consider a report by Councillor Julian Thompson-Hill, Lead Member for Finance, Performance and Strategic Assets (copy enclosed) updating Cabinet on the performance of the treasury management function and to demonstrate compliance with treasury limits and Prudential Indicators during 2020/21.

RESOLVED that Cabinet –

(a)       note the performance of the Council’s Treasury Management function during 2020/21 and its compliance with the required Prudential Indicators as reported in the Annual Treasury Management Report 2020/21 (Appendix 1 to the report), and

(b)       confirms it has read, understood and taken account of the Wellbeing Impact Assessment (Appendix 2 to the report) as part of its consideration.

Councillor Julian Thompson-Hill presented the report updating members on the performance of the treasury management function and demonstrating compliance with treasury limits and Prudential Indicators during 2020/21.

In summarising the report Councillor Thompson-Hill highlighted the importance of treasury management and referred to the economic background and impact on treasury management activities.  He highlighted the main points for members in terms of borrowing and investment activity and confirmed compliance with all prudential indicators set, guiding members through those indicators as detailed in Annex B confirming appropriate ratios of financing costs and borrowing levels within limits.  It was noted that Governance and Audit Committee monitored the treasury management function and had accepted the report.  The purpose of the report was to provide assurance in respect of the Council’s treasury management activities.

During the ensuing debate the Head of Finance responded to questions regarding the treasury management function going forward.  Given that the Council was a borrowing authority the treasury management function focused on the balance between funding capital ambitions and ensuring sufficient cash flow to pay wages and suppliers.  In terms of interest rates there was no indication of any increase meaning borrowing interest rates would remain low going forward and decisions would need to be made in the future on what was affordable, maintaining the balance between the delivery of services on a day to day basis and investment in capital projects.  With regard to the conclusions of the Wellbeing Impact Assessment, Councillor Mark Young felt that the scoring for sustainability (2 out of 4 stars) including low carbon and biodiversity did not accurately reflect the hard work undertaken in that regard.  The Head of Finance explained the reasoning behind the scoring methodology where a cautious approach had been taken and whilst the treasury management function facilitated specific projects in that regard, the individual assessments for those specific projects had included those references.  However it was agreed to review that approach during the next assessment process in light of Councillor Young’s comments.  The Leader confirmed assurance could be taken from the report and reiterated the financial balance between dealing with core functions and emerging pressures and pursing the Council’s ambitions.

The Chief Executive referred to the work beginning on developing the new Corporate Plan and future priorities for investment and he believed that whilst the Council should retain its ambitions, they must be affordable to ensure core functions and associated pressures were appropriately funded.  He also paid tribute to the close working of the Lead Member and Head of Finance, and finance staff for all the work undertaken which provided assurance and confidence in the Council’s financial management.  The Leader echoed those sentiments acknowledging the work of the finance team.

RESOLVED that Cabinet –

(a)       note the performance of the Council’s Treasury Management function during 2020/21 and its compliance with the required Prudential Indicators as reported in the Annual Treasury Management Report 2020/21 (Appendix 1 to the report), and

(b)       confirms it has read, understood and taken account of the Wellbeing Impact Assessment (Appendix 2 to the report) as part of its consideration.