Agenda item

The Council considered the Capital and Investment Outturn report for 2019-20, which had set out:

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

·       a summary of the approved strategy for 2019-20

·       a summary of the treasury management activity for 2019-20

·       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 £48.1 million, which was less than the revised budget by £38.7 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 ben £1.02 million and the outturn was £926,639.  This was due to slippage in the capital programme in 2018-19.

The Council’s investment property portfolio stood at £153 million at the end of the year. Rental income had been £8.4 million, and income return had been 6% 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. 

The Council had borrowed short-term from other local authorities for cash flow purposes and ensured that there was no cost of carry on this.  No additional long-term borrowing was taken out during the year.  As at 31 March 2020, the Council held £107.6 million in investments, £44 million of short-term borrowing and £192 million of long-term borrowing resulting in net debt of £129 million.

The report had confirmed that the Council had complied with its prudential indicators, treasury management policy statement and treasury management practices (TMPs) for 2019-20.  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.

The yield returned on investments had been lower than estimated, but the interest received was 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 interest receivable and payable and a lower charge for MRP during the year as part of the budget monitoring when reported to councillors during the year.

The report had also been considered by the Corporate Governance and Standards Committee and Executive at their respective meetings held on 30 July and 22 September 2020, and both had endorsed the recommendation in the report. 

Upon the motion of the Lead Councillor for Resources, Councillor Tim Anderson, seconded by the Leader of the Council, Councillor Joss Bigmore, the Council

RESOLVED:

(1)     That the treasury management annual report for 2019-20 be noted.

(2)     That the actual prudential indicators reported for 2019-20, as detailed in Appendix 1 to the report submitted to the Council, 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.