Issue - meetings

The Chairman of the Corporate Policy and Resources Committee presented the report which had been considered by the Committee and referred to Council for approval.

The mid-year report had been prepared in compliance with CIPFA’s Code of Practice on Treasury Management, and covered the following:

• An economic update for the first part of the 2019/20 financial year;
• A review of the Treasury Management Strategy Statement and Annual Investment Strategy;
• The Council’s capital expenditure, as set out in the Capital Strategy, and prudential indicators;
• A review of the Council’s investment portfolio for 2019/20;
• A review of the Council’s borrowing strategy for 2019/20;
• A review of compliance with Treasury and Prudential Limits for 2019/20.

Brexit remained uncertain. The Bank Base rate had remained at 0.75%.  CPI for August was 1.7% and likely to remain around the 2% mark, however a Brexit no deal may result in increases to 4%.

There had been no changes to the Treasury Management Strategy Statement and Annual Investment Strategy.

The forecast out-turn for Capital Expenditure was £22.655m against an original budget (including carry forwards) of £30.636m with £9.215m slippage to 2020/21.

The Council was projected to have £13.706m invested by the year end having generated £0.238m in investment Interest

In respect of commercial investment in property, the total acquisition costs year to date were £5.668m.  The Council now had seven properties in its portfolio.  The total capital spend on acquisition of investment property was £22.999m at a gross return of 6.4% per annum and a contribution of £0.720m to service delivery in 2019/20.

It was anticipated that total external borrowing would be £28.189m by the year end.

In response to a question regarding future plans for acquisitions outside of the District, the Chairman of the Corporate Policy Resources Committee advised that whilst there were still monies within the budget for such acquisitions, no such purchases were currently under consideration or being appraised.

Having being moved and seconded on being put to the vote it was: -

RESOLVED that Council note the report, the treasury activity and accept the recommendation from Corporate Policy and Resources Committee that the changes to the prudential indicators be approved.

Members considered the mid-year update for Treasury Management, including the revision of prudential indicators in accordance with the Local Government Act 2003.

The report reflected implications of the revised capital programme that had been presented in the Budget and Treasury monitoring mid-year report that had just been considered; in addition this report also developed the strategy for 2020/21.

There had been no changes to the Treasury Management Strategy, and no breaches of either Treasury or Prudential indicators.

The latest forecast net borrowing requirement was £40,589,000, down from the estimate of £43,184,000 from the start of the financial year.  This revised estimate was mainly due to slippage on the capital programme.

Members asked questions of officers; further information was provided:

·         Over 50% of the value of the asset register was due to the commercial portfolio;

·         Members were reminded of the process for borrowing that had been delegated to officers.  All borrowing was taken with due diligence, looking at the interest rates that WLDC would incur in accordance with the capital programme.  Councillors were part of the approval process; in addition all borrowing had to be signed off by the Section 151 Officer, with a review from the Deputy Section 151 Officer.

RESOLVED to note the report and the treasury activity and recommend the changes to prudential indicators to Full Council.