Issue - meetings

To receive the Treasury Management Mid - Year Report 2020-21.

The Committee considered the Treasury Management Mid-Year Report 2020-21.

During the discussion of this item, the following points were made:

·         It was one of three treasury management reports which went through Audit Committee and on to Council, the others being the Outturn Report and the Treasury Management Strategy.

·         The format of the report had been changed to make it more readable and accessible.

·         The statutory prudential indicators had not been breached.

·         The Chief Financial Officer had asked that the report demonstrated that the Council was on a secure financial footing.

·         The report demonstrated the level of debt that the Council held in terms of its overall internal and external debt, and the amount of that debt that was not funded by invest to save schemes or the income lines coming through the Council’s development programmes.

·         The cost that the council taxpayer had to fund was £7.52 for an average Band D property.  He explained how this figure was reached.

·         The debt financing costs in the Council’s Medium Term Financial Plan were £7.8m. 

·         Net indebtedness after cash balances was £83m at end of September.

·         The Government had provided some funding throughout the year to assist with cash flow, because of the pandemic.

·         The amount of debt taken on board and investment balances had increased.  Most of the money in the cash investments balances was a short-term hold based on the Council’s cash flow expectations.

·         Operational boundaries for debt and permitted debt levels had not been breached.  The Council had tried to convert a certain amount of internal borrowing to external borrowing ratio to what was recognised as an industry standard rate.  More debt had been taken on, but historically the Council had been under borrowed.

·         Councillor Sargeant commented that the report was much clearer.

·         Councillor Burgess commented that the Audit Committee was not a means of political point scoring and provided independent assurance.  She went on to ask whether the presentation of the cost of financing debt and the net position had changed from previous years.  The Head of Finance stated that the presentation had changed.  It represented that not all of the £7.8m gross figure was funded by council tax income, being mostly funded through other income streams from the commercial investments and the treasury investments, and invests to save. 

·         Councillor Burgess commented that the presentation of the net indebtedness had changed and asked whether the Covid funding would be time limited or spent in the near future, meaning that the net indebtedness would rise.  The Head of Finance indicated that the Government had given certain leeway as a result of Covid such as not having to pay all the business rates on a monthly basis.  The indebtedness levels would decrease and more detail would be provided in the Outturn report.

·         Councillor Burgess noted that the Value of Realisable Assets ratio to External Borrowing was 1.53:1, and asked the Head of Finance if he was comfortable with this level and what the lowest rate was that he would allow.  ...  view the full minutes text for item 32