Agenda item

This report presents the draft Treasury Management Strategy (TMS) for 2024/25 for consideration by the Committee.

Amanda Healy, Head of Finance introduced the report that presented the draft Treasury Management Strategy (TMS) for 2024/25 for consideration by the Committee, with the final version of the TMS including the views of the Committee to be included in the annual budget setting report to be presented to Cabinet and Full Council in February 2024.

In considering the report the Committee noted:

·             The strategy was currently in draft format and would be presented back to the Committee upon its completion, ahead of its inclusion in the annual budget setting report that would go to Cabinet and Council in February 2024.

·             The Strategy set out the framework for the Council’s Treasury Management activity in 2024/25 and included an outline of the Council’s borrowing strategy and sources of debt finance (including the Liability Benchmark), investment strategy (including types and prescribed limits), Treasury Management Indicators for 2024/25, alternative options and strategies along with an external and local context.

·             The Strategy had been produced in compliance with the CIPFA Treasury Management Code of Practice & Prudential Code for Capital Finance.

The Committee was then invited to raise questions and comments on the report which are summarised below:

·             Following a Committee query in relation to the use of Green Bonds to support specific projects, the Committee was advised that Green Bonds had not been previously explored for use in Brent. It was noted that bonds were generally used to support small scale projects and could incur high administration costs. Officers agreed to examine the practicalities of the use of Green Bonds in Brent and share their findings with the Committee at a future meeting.

·             The Committee queried how much long term borrowing from PWLB was forecast to be borrowed in 2024/25. In response the Committee was advised that £650m would need to be borrowed over a 4 year period, this included borrowing requests for projects in 2023/24 that had not been undertaken yet.

·             The Committee required further clarity in relation to which public sector bodies (referred to in the Committee report) the Council could borrow short term loans from to cover temporary cash flow pressures, in response the Committee heard that money could be borrowed from other Local Authorities, this had previously been an active market, however since the recent Section 114 notices it was less active but remained a consideration if needed.

·             The Committee requested information was provided at a future meeting in relation to how much borrowing from other local authorities had been undertaken.

·             The Committee acknowledged the challenges in the current economic environment impacting the Council’s ability to focus funds to support the costly climate change ambitions the Council had previously highlighted as a priority; however, felt that concerted efforts should be made in seeking additional funding specifically to support this, particularly in light of Brent having declared a climate emergency.

·             Following a Committee query in relation to how robust the long term Capital Programme was and the contingencies in place, the Committee was advised that when budgets were set they took in to account the ambitions Brent had against the funding sources available. Viability was rigorously tested and revisited to ensure the maximum delivery of Capital Projects was possible.

·             The Committee clarified that the PWLB allowed authorities to repay loans before maturity and either pay a premium or receive a discount dependant on a set formula based on current interest rates, this was something the Council could take advantage of if it was expected to result in an overall cost saving or reduction in risk.

As there were no further questions the Chair thanked Amanda Healy for presenting the report and responding to the Committee queries.

The Committee RESOLVED to note the borrowing requirements detailed in the report, with further comments to be provided by the Committee when the strategy was brought back to the Committee upon its completion.