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Issue - meetings

Treasury Management Mid-Year Review 2018/19

Meeting: 18/11/2019 - Audit, Governance and Standards Committee (Item 58)

58 Treasury Management Mid-Year Review 2019/20 pdf icon PDF 122 KB

Additional documents:

Minutes:

The Director of Finance and Business Improvement presented his report setting out the activities of the Treasury Management function for the first six months of the 2019/20 financial year in accordance with CIPFA’s Code of Practice on Treasury Management in Local Authorities.

 

The Director of Finance and Business Improvement advised the Committee that:

 

·  The main elements of the Strategy were (a) that the Council uses cash for its capital investments rather than borrowing, and was still in the position that it had not borrowed to finance the Capital Programme, and (b) that the Council aimed to diversify its cash holdings to mitigate risks.  The Council held £27.98m of investments as at 30 September 2019 and these were spread over a range of financial institutions.

 

·  During the first six months of the financial year 2019/20, the Council had operated within the prudential and treasury indicators set out in the Treasury Management Strategy Statement and in compliance with the Council’s Treasury Management Practices. 

 

·  It was predicted that the Council would borrow before the end of the financial year to fund the Capital Programme.  Given the recent increases in rates charged by the Public Works Loan Board (PWLB), the Council would investigate a range of possible sources of borrowing in terms of finance and risk.  He was confident that the Council would be able to borrow relatively cheaply to fund the Capital Programme as and when it needed to do so.

 

In response to a question by a Member as to whether the Council should have borrowed sooner having regard to the increased cost of PWLB borrowing, the Director of Finance and Business Improvement advised the Committee that the problem with borrowing sooner was that the Council would have been holding large cash balances and the cost of borrowing would have been more than the cash would be earning.  The Corporate Finance team was keeping interest rates under review and the indications were that they would remain low for the foreseeable future.  The Council continued to be able to access borrowing at relatively low cost, so it had not missed an opportunity to borrow before PWLB rates were increased.

 

RESOLVED:

 

1.  That the position of the Treasury Management Strategy as at 30 September 2019 be noted.

 

2.  That no amendments to the current procedures are necessary as a result of the review of activities in 2019/20.