Issue - meetings

(A report by Brendan Arnold, Interim Director of Finance (S151 Officer))

The Committee received the Quarter 1 Treasury Management Report, which provided an overview of the Council’s treasury activities for the period ending 30th June 2025. The report was presented by the Treasury and Investment Manager (PSPSL) and formed part of the Council’s governance framework in accordance with the Chartered Institute of Public Finance and Accountancy (CIPFA) Code of Practice.

The Committee was advised that the Council had maintained a strong financial position during the first quarter of the financial year, with investment income exceeding expectations. The Council continued to operate with a low level of external borrowing, using internal resources to fund capital expenditure and maintain an under-borrowed position.

A key development highlighted in the report was the repayment of the long-standing State Street loan, which had carried a fixed interest rate of 11.125%. The loan had been replaced with a Public Works Loan Board (PWLB) loan at a significantly lower rate, resulting in projected long-term savings of approximately £660,000. The transaction was completed following a favourable offer from the loan holder, and the Council’s treasury team had acted promptly to secure the benefit. Officers undertook to provide a future note summarising the historical cost and context of the State Street loan, including the year it was taken out and the decision-making process.

Property fund investments were also discussed. Concerns were raised about liquidity and market conditions, with one fund having suspended trading due to high redemption requests and others experiencing delays in processing withdrawals. Officers confirmed that the Council was monitoring developments and would consider strategic changes when market conditions improved. It was noted that any losses from early exit would need to be financed from reserves. Officers confirmed they would continue to monitor property fund developments and report any strategic changes to the Committee.

Members discussed the report and commented as follows:

·         Members welcomed the repayment of the State Street loan and commended the treasury team for securing a favourable outcome. A request was made for a future note detailing the full historical cost of the State Street loan and the circumstances under which it was originally taken out.

·         A Member queried whether the Council remained compliant with its prudential indicators. Officers confirmed that all indicators had been met.

·         A Member asked whether the Council’s risk appetite for treasury management and borrowing had changed. Officers confirmed that the annual Treasury Management Strategy was reviewed and approved by Council each year and that no significant changes had been made.

·         A Member requested clarification on the valuation and ownership of the Municipal Buildings. Officers confirmed that the building was owned by the Council and that valuations were reviewed on a rolling basis, with full revaluations every three years. Officers undertook to confirm the current valuation and whether any charges or encumbrances exist.

The recommendation was moved by Councillor Andy Izard and seconded by Councillor Neil Drayton.

Resolved:

That the report be noted.