Issue - meetings

The Council considered the Capital and Investment Outturn report for 2021-22, which had set out:

·       a summary of the economic factors affecting the approved strategy and counterparty updates

·       a summary of the approved strategy for 2021-22

·       a summary of the treasury management activity for 2021-22

·       compliance with the treasury and prudential indicators

·       non-treasury investments

·       capital programme

·       risks and performance

·       Minimum Revenue Provision (MRP)

·       details of external service providers

·       details of training

In total, expenditure on the General Fund capital programme had been £39.78 million against the original budget of £148.3 million, and revised budget of £141.9 million.  Details of the revised estimate and actual expenditure in the year for each scheme were set out in Appendix 3 to the report. The budget for Minimum Revenue Provision (MRP) had been £1.5 million and the outturn was £1.38 million.  This was due to slippage in the capital programme in 2020-21.

The Council noted that officers had reviewed the capital programme and had determined that the following schemes were no longer required:

·       Albury closed burial grounds £57,000 in 2022-23

·       Mill Lane Flood Protection works - £16,000 2022-23 and £200,000 2023-24

·       Merrow & Burpham surface water study - £15,000 in 2022-23

At its meeting on 27 October 2022, the Executive had agreed to remove those schemes from the General Fund Capital Programme. This would reduce the Council’s underlying need to borrow for capital purposes and would generate a saving to the revenue account in respect of MRP and Interest of approximately £10,000 over the life of the schemes.

The Council’s investment property portfolio stood at £174 million at the end of the year. Rental income had been £8.75 million, and income return had been 5.3% against the benchmark of 4.7%.

The Council’s cash balances had built up over a number of years, and reflected a strong balance sheet, with considerable revenue and capital reserves.  Officers carried out the treasury function within the parameters set by the Council each year in the Capital and Investment Strategy.  As at 31 March 2022, the Council held £157 million in investments, £304 million in borrowing of which £170 million related to the HRA, and £134 million was short term borrowing resulting in net debt of £147 million.

The Council had borrowed short-term from other local authorities for cash flow purposes and aimed to minimise any cost of carry on this.  The Council had taken out three loans for Weyside Urban Village under the infrastructure rate.  This interest was capitalised against the project and not charged to the General Fund as interest payable.

The report had confirmed that the Council had complied with its prudential indicators, treasury management policy statement and treasury management practices (TMPs) for 2021-22.  The policy statement was included and approved annually as part of the Capital and Investment Strategy, and the TMPs were approved under delegated authority.

Interest paid on debt had been lower than budget, due to less long-term borrowing taken out on the general fund because of slippage in the capital programme.  ...  view the full minutes text for item 80

Decision:

1.     Approved the removal of the following schemes from the capital programme:

·        Albury closed burial grounds £57,000 in 2022/23

·        Mill Lane Flood Protection works - £16,000 2022/23 and £200,000 2023/24

·        Merrow & Burpham surface water study - £15,000 in 2022/23

2.     Recommended to Council at the meeting to be held on 6 December 2022,

·        That the capital and investment outturn report be noted.

·       That the actual prudential indicators reported for 2021/22, as detailed in Appendix 1 to the committee report, be approved.

Reason(s):

1.     To comply with the Council’s treasury management policy statement, the Chartered Institute of Public Finance and Accountancy (CIPFA) Code of Practice on treasury management and the CIPFA Prudential Code for Capital Finance in Local Authorities.

2.      As per the treasury management code although the scrutiny of treasury management (and indeed all finance) has been delegated to CGSC ultimate responsibility remains with full Council this report therefore fulfils that need.

Other options considered and rejected by the Executive:

1.     To have invested in lower credit quality investments, but this would have increased the Council’s risk exposure.

2.     To have borrowed longer-term for the Council’s capital programme but would have suffered a cost of carry due to the slippage in the programme.

Details of any conflict of interest declared by the Leader or lead councillors and any dispensation granted:

None.

The annual outturn report included capital expenditure, non-treasury investments and treasury management performance for 2021-22.

The comments arising from the Corporate Governance and Standards Committee held on 29 September 2022 were set out in the Supplementary Information Sheet.

The Lead Councillor for Resources introduced the report.

There had again been slippage on capital projects and there was a Capital Programme outturn of £40 million compared to the original budget of £148 million and a revised budget of £142 million. Consequently, there was a reduction in the minimum revenue provision of £1.38 million against a budget on £1.5 million. At year end there was £152 million in investments compared to £309 million in borrowing.

Overall, there was a satisfactory performance with some high returns. The lower yield on investments was offset by higher interest accrued by retained cash due to programme slippage.

The Council had taken out its first Public Works Loan Board (PWLB) local infrastructure rate loans for Weyside Urban Village of £22.8 million. The interest rate on those loans would be capitalised so that the borrowing could be repaid from capital receipts from land sales as a part of the scheme. 

Some Housing Revenue Account (HRA) reform loans had become payable, and the Council had repaid a £45 million loan from the HRA reserves.

Part of the Council’s M&G funds had been redeemed with a gain of £1.4 million which had contributed towards balancing the 2021-22 budget.

Given there had been slippage again on capital projects it was proposed there would be a more pragmatic approach to budget setting in anticipation of what might realistically be achieved alongside a regular monitor of expenditure throughout the next financial year. Consequently, the Executive,

RESOLVED:

(1)       To approve the removal of the following schemes from the capital programme:

·       Albury closed burial grounds £57,000 in 2022/23

·       Mill Lane Flood Protection works - £16,000 2022/23 and £200,000 2023/24

·       Merrow & Burpham surface water study - £15,000 in 2022/23

(2)    To recommend to Council at its meeting to be held on 6 December 2022,

·       That the capital and investment outturn report be noted.

·      That the actual prudential indicators reported for 2021/22, as detailed in Appendix 1 to the report, be approved.

Reasons:

(1)       To comply with the Council’s treasury management policy statement, the Chartered Institute of Public Finance and Accountancy (CIPFA) Code of Practice on treasury management and the CIPFA Prudential Code for Capital Finance in Local Authorities.

(2)        As per the treasury management code although the scrutiny of treasury management (and indeed all finance) had been delegated to the Corporate Governance and Standards Committee, ultimate responsibility remained with full Council - this report therefore fulfilled that need.

The Committee considered the annual outturn report on capital expenditure, non-treasury investments and treasury management performance for 2021-22.

In total, expenditure on the General Fund capital programme had been £39.78 million against the original budget of £148.3 million, and revised budget of £141.9 million.  Details of the revised estimate and actual expenditure in the year for each scheme were set out in Appendix 3 to the report.

The budget for Minimum Revenue Provision (MRP) had been £1.5 million and the outturn was £1.38 million.  This was due to slippage in the capital programme in 2020-21. 

Officers had reviewed the capital programme and had determined that the following schemes were no longer required:

·       Albury closed burial grounds £57,000 in 2022/23

·       Mill Lane Flood Protection works - £16,000 2022/23 and £200,000 2023/24

·       Merrow & Burpham surface water study - £15,000 in 2022/23

This would reduce the Councils underlying need to borrow for capital purposes and generate a saving to the revenue account in respect of MRP and Interest of approximately £10,000 over the life of the schemes.

The Council’s investment property portfolio stood at £174 million at the end of the year.  Rental income was £8.75 million, and our income return had been 5.3% against the benchmark of 4.7%.

The Council’s cash balances had built up over several years, and reflected our strong balance sheet, with considerable revenue and capital reserves.  Officers carried out the treasury function within the parameters set by the Council each year in the Capital and Investment Strategy.  At 31 March 2022, the Council held £152 million in investments, £303 million in borrowing of which £147 million related to the HRA, and £134 million was short term borrowing, resulting in net debt of £157 million.

The Council borrowed short-term from other local authorities for cash flow purposes and aimed to minimise any cost of carry on this.  The Council had taken out three loans for Weyside Urban Village under the infrastructure rate.  This interest was capitalised against the project and not charged to the General Fund as interest payable.

Section 8 of the report confirmed that the Council had complied with its prudential indicators, treasury management policy statement and treasury management practices (TMPs) for 2021-22.  The policy statement was included and approved annually as part of the Capital and Investment Strategy, and the TMPs were approved under delegated authority.

The treasury management performance over the last year, compared to estimate, had been summarised in the report, and the factors affecting this performance had been highlighted in the report. There had been slippage in the capital programme which resulted in a lower Capital Financing Requirement than estimated. Interest paid on debt had been lower than budget, due to less long-term borrowing taken out on the general fund because of slippage in the capital programme.

The yield returned on investments had been lower than estimated, but the interest received had been higher due to more cash being available to invest in the year – a direct result of the capital  ...  view the full minutes text for item 25

The Council considered the Capital and Investment Outturn report for 2020-21, which had set out:

·       a summary of the economic factors affecting the approved strategy and counterparty updated

·       a summary of the approved strategy for 2020-21

·       a summary of the treasury management activity for 2020-21

·       compliance with the treasury and prudential indicators

·       non-treasury investments

·       capital programme

·       risks and performance

·       Minimum Revenue Provision (MRP)

·       details of external service providers

·       details of training

In total, expenditure on the General Fund capital programme had been £29.4 million against the original budget of £171.5 million, and revised budget of £28.8 million.  Details of the revised estimate and actual expenditure in the year for each scheme were set out in Appendix 3 to the report. The budget for Minimum Revenue Provision (MRP) had been £1.64 million and the outturn was £1.29 million.  This was due to slippage in the capital programme in 2019-20.

The Council noted that one of the strands of the Savings Strategy was to review the projects in the capital programme.  At its meeting on 24 August 2021, the Executive had agreed to remove three schemes due to the length of time they had been in the programme, and as such the original proposal was no longer relevant and a new business case would need to be prepared if any of the schemes were to come forward in the future.  These were:

·       Guildford Gyratory and Approaches - £10.967 million on the provisional capital programme in 2024-25

·       Stoke Park Office Accommodation - £665,000 on the provisional programme in 2024-25

·       Stoke Park – Home Farm redevelopment - £4 million on the provisional programme in 2024-25

The Council’s investment property portfolio stood at £155 million at the end of the year. Rental income had been £8.1 million, and income return had been 5.8% against the benchmark of 4.6%.

The Council’s cash balances had built up over a number of years, and reflected a strong balance sheet, with considerable revenue and capital reserves.  Officers carried out the treasury function within the parameters set by the Council each year in the Capital and Investment Strategy.  As at 31 March 2021, the Council held £159.1 million in investments, £310.5 million in long-term borrowing of which £118.5 million was short-term borrowing, and £192 million in respect of long term borrowing related to the HRA, resulting in net debt of £151.4 million.

The Council had borrowed short-term from other local authorities for cash flow purposes and aimed to minimise any cost of carry on this.  No additional long-term borrowing was taken out during the year. 

The report had confirmed that the Council had complied with its prudential indicators, treasury management policy statement and treasury management practices (TMPs) for 2020-21.  The policy statement was included and approved annually as part of the Capital and Investment Strategy, and the TMPs were approved under delegated authority.

Interest paid on debt had been lower than budget, due to less long-term borrowing taken out on the general fund because of slippage in the capital  ...  view the full minutes text for item 48

Decision:

That the removal of the following schemes from the General Fund Capital Programme be approved:

(1)   Guildford Gyratory and Approaches

(2)   Stoke Park office accommodation

(3)   Stoke Park – Home Farm redevelopment

Recommendation to Council (5 October 2021):

(1)        That the Treasury Management Annual Report for 2020-21 be noted.

(2)        That the actual prudential indicators reported for 2020-21, as detailed in Appendix 1 to the report submitted to the Executive, be approved.

Reason:

To comply with the Council’s treasury management policy statement, the Chartered Institute of Public Finance and Accountancy (CIPFA) Code of Practice on treasury management and the CIPFA Prudential Code for Capital Finance in Local Authorities.

Other options considered and rejected by the Executive:

None.

Details of any conflict of interest declared by the Leader or lead councillors and any dispensation granted:

None.

The Executive considered the annual capital and investment outturn report, which included capital expenditure, non-treasury investments and treasury management performance for 2020-21.

It was noted that expenditure on the General Fund capital programme was £29.4 million against the original budget of £171.5 million, and revised budget of £28.8 million.  The budget for Minimum Revenue Provision (MRP) was £1.64 million and the outturn was £1.29 million.  There was slippage in the capital programme which resulted in a lower Capital Financing Requirement than estimated. There was a need to ensure accurate profiling whilst it was noted that slippage in the capital programme in 2019-20 was also due, in part, to the Covid pandemic. Three capital items were recommended for removal from the programme as the original proposals were no longer relevant having been either surpassed or merged within other evolving projects. The property portfolio continued to perform well. It was noted that the  Council’s assets were currently subject to review alongside the collaboration initiative with Waverley Borough Council in order to better serve the needs of the community. The Council’s investment property portfolio had increased by £5 million and stood at £155 million at the end of the year. Rental income was £8.1 million, and income return 5.8% against the benchmark of 4.6%. Interest paid on debt was lower than budget, due to less long-term borrowing taken out on the general fund because of slippage in the capital programme providing a more positive budget outlook. The Council had complied with prudential indicators and treasury management policy statement and practices for the period.

The outturn report also been considered by the Corporate Governance and Standards Committee at its meeting on 29 July 2021 and the comments arising were set out in the report. The Leader considered that investments for the period had been restrained demonstrating caution and prudence during a challenging period and commended officers for careful budgetary management.

Having considered the report, the Executive

RESOLVED:

That the following schemes be removed from the General Fund Capital Programme:

(1)   Guildford Gyratory and Approaches

(2)   Stoke Park office accommodation

(3)   Stoke Park – Home Farm redevelopment

The Executive further

RECOMMEND to Council (5 October 2021):

(1)        That the Treasury Management Annual Report for 2020-21 be noted.

(2)        That the actual prudential indicators reported for 2020-21, as detailed in Appendix 1 to the report submitted to the Executive, be approved.

Reason:

To comply with the Council’s treasury management policy statement, the Chartered Institute of Public Finance and Accountancy (CIPFA) Code of Practice on treasury management and the CIPFA Prudential Code for Capital Finance in Local Authorities.

The Committee considered the Capital and Investment Outturn Report for 2020-21, which had included:

·        a summary of the economic factors affecting the approved strategy and counterparty update

·        a summary of the approved strategy for 2020-21

·        a summary of the treasury management activity for 2020-21

·        details of compliance with the treasury and prudential indicators

·        non-treasury investments

·        capital programme

·        risks and performance

·        Minimum Revenue Provision (MRP)

·        details of external service providers

·        details of training

The Committee was informed that total expenditure on the General Fund capital programme in 2020-21 had been £29.4 million, against the original budget of £171.5 million, and revised budget of £28.8 million.  Details of the revised estimate and actual expenditure in the year for each scheme were set out in Appendix 3 to the report. Although the budget for MRP had been £1.64 million, the outturn had been £1.29 million, due to slippage in the capital programme in 2019-20.

The Committee noted that one of the strands of the Council’s savings strategy was to review the projects in the capital programme.  Officers had recommended that three capital schemes be removed due to the length of time they had been in the programme, and as such the original proposal was no longer relevant and a new business case would need to be prepared if any of the schemes were to come forward in the future.  These were:

·       Guildford Gyratory and Approaches - £10.967 million on the provisional capital programme in 2024-25

·       Stoke Park Office Accommodation - £665,000 on the provisional programme in 2024-25

·       Stoke Park – Home Farm redevelopment - £4 million on the provisional programme in 2024-25

It was also noted that the Council’s investment property portfolio stood at £155 million as at 31 March 2021.  Rental income had been £8.1 million, and income return was 5.8% against the benchmark of 4.6%.

The Council’s cash balances had built up over a number of years, and reflected the strong balance sheet, with considerable revenue and capital reserves.  Officers carried out the treasury function within the parameters set by the Council each year in the Capital and Investment Strategy.  As at 31 March 2021, the Council held £159.1 million in investments, £310.5 million in long-term borrowing of which £118.5 million is short-term borrowing, and £192 million is long term borrowing (related to HRA) so net debt of £151.4 million.

The report confirmed that the Council had complied with its prudential indicators, treasury management policy statement, and treasury management practices for 2020-21. 

The Committee noted that the slippage in the capital programme had resulted in a lower Capital Financing Requirement than estimated. Interest paid on debt had been lower than budget, due to less long-term borrowing taken out on the General Fund because of slippage in the capital programme.

The yield returned on investments had been lower than estimated, but the interest received had been higher due to more cash being available to invest in the year – a direct result of the capital programme slippage.

Officers had been reporting higher  ...  view the full minutes text for item 15