Issue - meetings

This report provides an update on Treasury activity for the first half of the financial year 2022-23.

Cabinet RESOLVED:

(1)      To note the 2022-23 Mid-Year Treasury report for reference on to Council, along with the fact that the Council has been fully compliant with the Council’s Treasury Management indicators, in compliance with CIPFA’s Code of Practice on Treasury Management (the Code).

Councillor Mili Patel (Deputy Leader & Cabinet Member for Finance, Resources and Reform) introduced a report updating Members on Treasury Management activity for the first half of the financial year 2022-23.

In considering the report Members noted the economic context under which the Council’s Treasury Management Strategy had been operating including the ongoing impact of the war in Ukraine current rate of inflation and higher interest rates along with the ongoing uncertainty and volatility in relation to financial markets, which it was recognised had been exacerbated by the fiscal plans introduced by the Government towards the end of September.

In noting the update provided in relation to the Council’s debt management position, as detailed within section 3.18 – 3.32 of the report, Members were advised that new external borrowing had been minimised to meet cash flow requirements, which included borrowing to support the viability and affordability of the Capital Programme during current market volatility.  The estimated borrowing requirement for the remainder of the financial year 2022/23 was noted as being in excess of £50m, which took account of the Council’s ongoing capital financing requirement, usable reserves, planned capital expenditure and minimum revenue provision, Members were advised that the Council’s main objective when borrowing remained to ensure an appropriate balance between securing low interest costs and achieving cost certainty.  In terms of long-term borrowing options the Public Works Loan Board (PWLB) remained the main source, however, other low cost forward funding options also continued to be explored as opportunities arose.  Members’ attention was also drawn to the movement in standard rates at which local authorities could borrow from the Public Works Loan Board (PWLB) along with the change in lending arrangements, designed to ensure that assets were not being invested primarily for yield.  Whilst this restriction would not apply to investment in regeneration activities where “debt for yield” was not the primary purpose Members were assured that the Council was not planning to purchase any investment assets primarily for yield meaning it was able to continue accessing PWLB borrowing facilities.

Members also noted the update provided in relation to the Council’s Treasury Investment Activity, as detailed in sections 3.33 – 3.41 of the report with most of the Council’s funds continuing to be held in Money Market Funds.

Members welcomed the report and prudent approach being delivered in terms of the Council’s Treasury Management activity to support delivery of the Council’s wider ambitions and priorities given the challenging economic context under which the Treasury Management Strategy was having to be delivered. Having noted the assurance provided that the Council had fully complied with the Treasury Management Indicators for 2022/23, as detailed within Appendix 1 of the report Cabinet RESOLVED to note the 2022-23 Mid-Year Treasury report and approve it being forwarded on to Council, in compliance with CIPFA’s Code of Practice on Treasury Management (the Code).