The Finance Manager presented his report setting out the activities of the Treasury Management function for the first six months of the 2021/22 financial year in accordance with CIPFA’s Code of Practice on Treasury Management in Local Authorities. The Finance Manager advised the Committee that:

·  The Treasury Management Strategy for 2021/22 was approved by the Council on 24 February 2021 and the key aim was to keep investments short and to use cash balances to fund the Capital Programme due to low investment returns. 

·  Investment balances had averaged around £33m over the year so far.  This was higher than in previous years mainly due to business and COVID grant funding from the Government and slippage within the Capital Programme.  However, grants would soon be repaid, and the Capital Programme would accelerate over the next few months, which in turn would reduce this balance.

·  All investment funds had been held in call accounts, notice accounts, money market funds and short-term fixed deposits.

·  As at 30 September 2021, investments totalled £45.19m and the Council had short-term external borrowing of £9m from other local authorities.

·  The Council was looking to transfer some of its short-term borrowing for the certainty of longer-term rates and had taken out a loan with the Public Works Loan Board after its rates dropped significantly following the recent budget announcement.

·  During the first six months of the financial year 2021/22, the Council had operated within the prudential and treasury indicators set out in the Treasury Management Strategy Statement and in compliance with its Treasury Management Practices.

In response to questions, the Finance Manager advised the Committee that:

·  Borrowing at present was for short-term liquidity to cover peaks and troughs within the cashflow.  However, the Capital Programme was starting to escalate, and borrowing would increase.

·  Short-term borrowing was anything less than one year.  The decision had been made to lock into the loan from the Middlesbrough Teesside Pension Fund because the funding was required, the rates were good and to avoid the need to re-finance after a few months.

·  All of the Council’s institutions were highly rated and as security of capital was an investment priority, it was the practice to spread the risk across several institutions.  However, as requested, a comparison could be provided at the next meeting of the costs and returns associated with the current investment profile and those resulting from overnight deposits with the Bank of England.

RESOLVED:

1.  That the position regarding the Treasury Management Strategy as at 30 September 2021 be noted.

2.  That no amendments to the current procedures are necessary as a result of the review of activities during the first six months of the 2021/22 financial year.