Agenda item

Annual Treasury Management Review 2020/21

To consider the Annual Treasury Management Review for 2020/21 prior to it being submitted to Council for approval (report of the Treasury and Investment Manager (PSPS) enclosed).

 

Minutes:

Consideration was given to the report of the Executive Director Strategy and Resources (S151) which considered the Annual Treasury Management Review 2020/21 prior to it being submitted to Council for approval.

 

The Council was required by regulations issued under the Local Government Act 2003 to produce an annual treasury management review of activities and the actual prudential and treasury indicators for 2020/21.  The report met the requirements of both the CIPFA Code of Practice on Treasury Management (the Code) and the CIPFA Prudential Code for Capital Finance in Local Authorities (the Prudential Code).

 

During 2020/21, the following reports had been submitted:

 

·         An annual treasury strategy in advance of the year (Council 26 February 2020 );

·         A mid year (minimum) treasury update report (Council 20 January 2021);

·         An annual review following the end of the year, describing the activity compared to the strategy (the report under consideration)

 

The regulatory environment placed responsibility on members for the review and scrutiny of treasury management policy and activities. The report was therefore important in that respect, as it provided details of the outturn position for treasury activities and highlighted compliance with the Council’s policies previously approved by members.

 

The Council confirmed that it had complied with the requirement under the Code to give prior scrutiny to all of the above treasury management reports by the Governance and Audit Committee.  Member training on treasury management was last provided on 14 November 2019, in order to support the members’ scrutiny role.

 

The Treasury Management function was administered by Public Sector Partnership Services Ltd, on behalf of the Council.

 

The Council was currently in the process of producing its financial statements for the 2020/21 financial year, and these would be subject to external audit.  The figures in the report were therefore subject to change, and any such changes would be reflected in the report submitted to Council.

 

The report summarised the following:

 

·         Capital activity during the year;

·         Impact of this activity on the Council’s underlying indebtedness (the Capital Financing Requirement);

·         The actual prudential and treasury indicators;

·         Overall treasury position identifying how the Council had borrowed in relation to its indebtedness, and the impact on investment balances;

·         Summary of interest rate movements in the year;

·         Borrowing and investment outturn positions;

·         Economy and interest rates.

 

Consideration was given to the report, and the following points were raised:

 

·         With regard to monies borrowed by the Authority in 2012 to retain its housing stock some years ago, members commented that pressure should be put on the Government through the LGA to take forward the matter of the PWLB interest rate paid in relation to the current low interest rates, particularly at a time when funds were already stretched.

o   Officers confirmed that the Authority did have this borrowing on its books, and if interest rates changed and rose above the 3.48%, it would have the opportunity to repay the money early, and potentially receive a discount on the amount borrowed.  However, there was currently no economic benefit to repaying the debt early – the Assistant Director Finance agreed to continue to monitor.

 

AGREED:

That the report be noted.        

Supporting documents: