Decision details

To provide Members with an update on Treasury Management performance and activity to ensure best practice is maintained.

The Interim Treasury & Investments Manager, PSPSL presented a report by the Deputy Chief Executive (Corporate Development) & S151 which provided the 2024/25 Mid-Year update on the Council’s Treasury Management Strategy Statement and Annual Investment Strategy, attached as Appendix A within the report.

The report covered the following areas:

·         An economic update for the first half of the 2024/25 financial year;

·         The outlook for the remainder of the financial year along with interest rate forecasts;

·         A review of the Treasury Management Strategy Statement and Annual Investment Strategy;

·         The Council’s capital expenditure, as set out in the Capital Strategy, and prudential indicators;

·         A review of the Council’s investment portfolio for 2024/25;

·         A review of the Council’s borrowing strategy for 2024/25; and

·         A review of compliance with Treasury and Prudential Limits for 2024/25.

Councillor Richard Austin BME queried the prospective of selling and reinvesting the Council’s property funds, referring to a suggestion from the MP, Richard Tice. The Interim Treasury & Investments Manager, PSPSL advised that the position in relation to the Council's property funds was that they were kept under regular review. Members noted that consideration had been given to changes to capital regulations and minimum revenue provision, statutory guidance. He also advised that as part of the next review an information pack would be provided to Members to show what the implications of those legislation changes were, and it would also provide details what the performance of the property funds had been. A separate report would be presented to the Audit and Governance Committee and Full Council in relation to property funds investments as part of the normal review undertaken.

Councillor Paul Gleeson reminded members of the long term investment and from the amount of money that had been spent the Council was getting a good return. He was satisfied by the way that the treasury and the finances of the Council were being run.

Responding to a query from Councillor James Cantwell, seeking further commentary on the changes to the approved budget, referring to page 37 of Appendix A1 for the Town Centre Heritage Scheme and the revenues and benefits, the Interim Treasury & Investments Manager, PSPSL advised that full details were available within the minutes of the Cabinet meetings.

Adam Cartwright referred to the Lobo loan and queried whether there were any possibilities for exiting. The Interim Treasury & Investments Manager, PSPSL advised that it had been reviewed at the same time as the PWLB loan, however the premium had been considerably high due to interest rates. Members noted that the loan was continually being reviewed.

Councillor Mike Gilbert queried whether the revenue implications had been taken into consideration in respect of the capital investments. The Interim Treasury & Investments Manager, PSPSL confirmed that the revenue implications were detailed within the reports submitted to Cabinet for consideration in respect of the Capital Programme.

Councillor Anton Dani referred to the economic situation in respect of national and worldwide political changes and queried whether there would be any future risks to the Councils investments. He also referred to internal borrowing (page 25) and queried whether it was coming from the Council’s reserves or elsewhere. The Interim Treasury & Investments Manager, PSPSL reassured Members that global risks were being considered and that there were restrictions in place in terms of the countries where investments could be made. In respect of internal borrowing he explained that the Council incurs capital expenditure which if not met from reserves would incur a borrowing requirement that could be internal or external.

Members noted that the internal borrowing was not technically free of interest as no interest would be earned when borrowing instead of investing.

Councillor Gilbert referred to the property funds and queried whether the spread of risk was included in the prospectus for those investments.

The Interim Treasury & Investments Manager, PSPSL advised that when the decision was made to invest in property funds, various fund managers, along with the designated reviewing officers, were invited to a meeting, where they provided details of their strategy, and where they made their investments, etc. Members noted that, following the meeting, a presentation was being delivered by a fund manager.

RESOLVED:

That the report be noted and that the relevant comments be included within the report to Full Council on 20^th January 2025.