ANNUAL TREASURY MANAGEMENT
To receive a report by the Head of Finance & Property (copy enclosed) on the Annual Treasury Management and Treasury management update about the Council’s investment and borrowing activity during 2020/21. It also provides details of the economic climate during that time and shows how the Council complied with its Prudential Indicators, and the details of the Council’s TM activities during 2021/22 to date.
The Lead Member for Finance, Performance and Strategic Assets presented the Annual Treasury Management (TM) report (previously circulated). The report provided information on the Council’s investment and borrowing activity during 2020/21. It also provided details of the economic climate during that time and showed how the Council complied with its Prudential Indicators. Included alongside the Annual TM Report 2020/21 (Appendix 1) was the TM Update Report (Appendix 2) which provided details of the Council’s TM activities during 2021/22 to date.
Confirmation that the borrowing activity for the year had been slightly less than the previous year due to paying off historic lending. It was highlighted that the Council confirmed it had complied with its Prudential Indicators for
2020/21, which were set in February 2020 as part of the Council’s Treasury
Management Strategy Statement. Members were guided through Annex B which provided details of the Prudential Indicators (PI). Members were reminded that a number of the PI’s were presented to County Council as part of the Capital Report, creating a more focused set of PI’s presented to this committee. The PI’s had addressed the level of borrowing and how the authority was able to borrow.
The Head of Finance and Property provided further information on the information contained within the report.
Members were guided to Appendix 2 – Treasury Management update. Members heard regular meetings with an independent TM consultant continued to take place to discuss considered estimates to potential changes in interest rates, the economy, political stance and the international financial position. The authority had been required to spend funds to aid the recovery of the Covid-19 Pandemic. Continued evaluation of borrowing and rates was vital.
The HFP expanded on the Medium Term Capital Strategy, stating work had begun to develop a medium term strategy for capital. This would help identify projects that the authority was planning to develop and invest in over a 5 to 10 year period, but had not yet progressed through the approval process. This would have an impact on the level of borrowing that the Council will require to undertake over the coming years. Members were informed a detailed model was currently being developed with our Treasury Management advisers to help inform the decision making process ensuring the correct balance was maintained between the need to invest in our assets and the ability to continue to deliver an ambitious investment programme ensuring the plans remain prudent and affordable.
Members thanked the Lead Member and HFP for the detailed reports and noted the list of abbreviations being very useful for members.
During the discussion the HFP expanded on members enquiries on the following:
· The Non-HRA ratio was borrowing that was set the authority was unable to change for a period of time. Officers considered all assets when looking at borrowing funds. Finding a balance of what was essential for the authority and the level of borrowing the authority held were considered when extra lending was required. The HFP stressed the complex working around this particular PI.
· Training had been provided by Arlingclose Ltd prior to the lockdown. The HFP stated he thought the next training session would be following the May2022 elections. He stated the contract with the company did include training, so if members thought a requirement for training was needed it could be asked.
· The authority had loaned funds from other local authorities for more short term lending needs. The credit rating of those authorities was taken into account. A broker performed tests and research to recommend the opportunities available for short term borrowing.
· Members were informed that officers last March 2020 deemed it was the opportunity to lock in £15m of borrowing to replace short term borrowing.
· The previous higher interest rate long term borrowing the authority held was reducing as the years progressed. It is often too difficult to refinance the historic debt as they often have clauses associated with them.
· The existing Capital required further borrowing over the next 5 years. The Capital projects already approved would be require funding.
· Planned work required for projects such as local bridges work was included within the horizon planning exercise.
· Confirmation that two flood defence schemes are being developed, one in Rhyl and one in Prestatyn. The final figure will only be known once the project has gone out to the tendering process.
Members were asked to raise any concerns with particular flooding concerns and funding with the Flood Risk engineer.
The Chair thanked the Finance department for the report and time invested in monitoring treasury management.
RESOLVED that the Governance and Audit Committee received the report and noted,
i. The performance of the Council’s Treasury Management function during 2020/21 and its compliance with required prudential indicators as reported in the Annual Treasury Management report 2020/21, appendix 1 to the report;
ii. The Treasury Management update report for performance to date in 2021/22;
iii. The Committee confirmed it had read, understood and taken into account the Well-being Impact Assessment, appendix 3 to the report.
- GAC TM Cover Report 28 Jul 21 New Format, item 6. PDF 152 KB
- GAC App 1 TM Review Report 28 Jul 21, item 6. PDF 222 KB
- GAC App 2 TM Update Report 28 Jul 21, item 6. PDF 116 KB
- GAC App3 TM Review Report Wellbeing Assessment 28 July 2021, item 6. PDF 96 KB