Agenda item

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

The Interim Treasury Manager, PSPSL provided a review of the Council’s treasury management activities for the financial year 2024/25. The report was presented in accordance with the Chartered Institute of Public Finance and Accountancy’s (CIPFA) Code of Practice on Treasury Management and formed a key part of the Council’s governance framework.

The Committee was advised that the report covered several key areas, including capital expenditure and financing, borrowing and investment activity, and compliance with prudential indicators. It was reported that the Council had maintained a strong financial position throughout the year, with investment income significantly exceeding budget expectations.

It was confirmed that the Council had continued to operate with a low level of external borrowing, maintaining an under-borrowed position by using internal resources to fund capital expenditure. The Council’s investment strategy had delivered strong returns, with treasury investments achieving an average rate of 5.29% and property fund investments returning 3.21%, resulting in a combined return of 4.57%. The net treasury income for the year was reported as £2.827 million, representing a surplus of £710,000 against the budget.

The Interim Treasury Manager, PSPSL advised that all treasury and prudential indicators had been met and that the Council remained compliant with its approved Treasury Management Strategy. The report also included a detailed breakdown of the Council’s investment portfolio and the performance of its property fund holdings.

The Committee was invited to scrutinise the report and provide any comments for consideration by Full Council at its meeting on 21^st July 2025.

Members discussed the report and commented as follows:

·         Members welcomed the strong financial performance reported for the year and noted the significant surplus generated from investment income. The Committee acknowledged that the Council’s strategy of maintaining an under-borrowed position had proven effective, with internal resources being used to fund capital expenditure and avoid the need for additional external borrowing.

·         Clarification was sought regarding the valuation of the Council’s property fund investments, which had decreased in value since purchase. It was noted that while the capital value of the investments remained below the original purchase price, there had been a modest recovery in the most recent year. The long-term nature of these investments was emphasised, and it was confirmed that the Council continued to receive regular income distributions from the funds.

·         Further clarification was requested on whether the property funds were limited to UK-based assets or included international holdings. It was confirmed that the Council’s investments were restricted to UK property funds, in line with the original investment strategy.

·         The Committee also discussed the balance between risk and return in the Council’s investment approach. It was noted that while higher returns had been achieved, the Council continued to prioritise security and liquidity in accordance with its Treasury Management Strategy.

The report was well received, and Members expressed satisfaction with the Council’s prudent and effective treasury management during the year.

The recommendation was moved by Councillor Anton Dani and seconded by Councillor Lina Savickiene.

Resolved:

That the Committees’ comments in respect of the Annual Treasury Report 2024/25, in Appendix 1 within the report, be noted for inclusion within the report to Full Council on 21 July 2025.