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Treasury Management Mid-Year Review 2022/23

Meeting: 16/01/2023 - Audit, Governance and Standards Committee (Item 72)

72 Treasury Management Mid-Year Review 2022/23 pdf icon PDF 220 KB

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The Finance Manager introduced his report setting out the activities of the Treasury Management function for the first six months of the 2022/23 financial year in accordance with CIPFA’s Code of Practice on Treasury Management in Local Authorities.  It was noted that:


·  The 2022/23 Treasury Management Strategy was approved by Council on 23 February 2022 and the key aims were to:

Use cash balances to finance the Capital Programme in the short term and to review borrowing options during the year for longer term financing;

Diversify the current portfolio as much as possible to reduce counterparty risk; and

Keep investments short so that they can be called upon for liquidity purposes.


·  Investments at the start of the year amounted to £38.75m and balances had peaked at £47m during the first part of the year.  The Council had £22.75m invested on 30 September 2022, all in short-term instruments.


·  Investment income to 30 September 2022 totalled £150k against a budget of £50k and, due to the increase in interest rates, it was expected that the Council would receive around £400k over the course of the year.


·  Total loan debt was currently £5m made up of PWLB long-term borrowing.  All short-term funding had been repaid during the first part of the year.


·  Due to rising interest rates and the need for future borrowing to fund the Capital Programme, the Council had entered into an agreement with Aviva Life and Pensions UK Ltd to forward borrow £80m to bring some certainty into borrowing rates.  The funds would be available during 2023/24 (£40m), 2024/25 (£20m) and 2025/26 (£20m) and the rate had been agreed at 2.89% over a 50-year term. 50-year rates with the PWLB were currently 4.66%.


·  All Prudential and Treasury Indicators had been complied with throughout the year.


In response to questions, the Officers explained that:


·  The Council’s investment priorities were, in order, Security of Capital, Liquidity and Yield.  However, the Council had now started to consider ESG investing as part of the financial analysis and the rates were quite competitive.


·  The Link Group was the Council’s treasury management adviser.  Treasury management was Link’s core business, and the Officers found their advice very useful.  Details of the firm’s fees and scope of work would be reported to the next meeting of the Committee.


·  The capital budget process was rigorous taking into account two key tests: deliverability and desirability in terms of achieving outcomes and supporting corporate objectives.  These assessments were kept under review.


·  In terms of slippage, the Capital Programme was much more realistic this year.  The measures in place and prudential indicators provided assurance that the Council was borrowing sensibly and had a reasonable Capital Programme with potential to achieve strategic objectives.




1.  That the position regarding the Treasury Management Strategy as at 30 September 2022 be noted.


2.  That no amendments to the current procedures are necessary as a result of the review of activities in 2022/23.