Agenda item

The Chairman of the Corporate Policy and Resources Committee, presented the report which sought approval of the Mid-Year Treasury Report 2022/23.

The report had been presented to the Corporate Policy and Resources Committee, where it had been fully considered and debated and stood referred to Council for approval.

Members were advised that there had been no breach of prudential indicators and the mid-year review had been undertaken, taking into account changes to the Capital Programme and forecasts of cash flow requirements including investing and borrowing estimates.

The report provided an update of the treasury management prudential indicators, as required in the prudential code and Local Government Act and set revised indicators for the remainder of the year.  The table at paragraph 4.3 of the report set out how these revisions and their impact on the cost of council tax and financing costs, in relation to the net revenue stream.

Members noted the key revision as the Capital Financing Requirement, this reflected the Council’s borrowing need for 2022/23, and had increased from £38.241m to £39.068m due to a change in the opening balance of the Capital Financing Requirement, after closing the accounts for 2021/22. 

The Council was currently holding around £20m of investments on a regularly monthly basis at the mid-year point, this was in the main due to additional grants from Government, however the Councils cashflow had been revised and by year end balances were expected to be lower. 

The report also indicated that the Council’s external borrowing may need to increase in the short term to smooth peaks and troughs in cashflow.

Finally, the report gave an update on the wider economy and interest rate forecasts, provided by the Council’s external Treasury advisors Link Asset Services.

Debate ensued and a question was raised in relation to the table on page 77 of the reports pack, headed Prudential indicator for Capital Expenditure. Members noted that there appeared to large difference between the original and revised estimate, particularly in respect of “Our People” and “Our Places”.  Members sought indication as to the reasons for this and whether this should be cause for concern.

In responding, the Section 151 Officer advised Members that in respect of “Our Place” this was due to delays and delivery on the LUF programme, but undertook to provide greater detail to all Members outside of the meeting in coming weeks.

Responding to comments around whether asset disposal should be considered given the nature of financial markets, the Section 151 Officer, reminded Members that, some assets generated an income which could be used for revenue reasons and allowed for a balanced budget.  If an asset was sold, whilst it would generate a one-off capital receipt, accounting regulations would only allow for that money to be used for capital expenditure going forward.   As such it was balancing act, ensuring the Council had access to the right types of fund at any one time.

Having been moved and seconded it was

RESOLVED that the recommendation from the Corporate Policy and Resources Committee be accepted and as such the Mid-Year Treasury Management Report and changes to Prudential Indicators be approved, as detailed at Section 4.3 of the report.