Agenda item

To receive the Treasury Mid Term Report.

The Financial Planning Specialist presented the Treasury Mid Term report.

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

·         Members were advised that there was an error in Table 10 (p65) and £4,000 should read £3,400. 

·         No prudential indicators had been broken in first six months of the financial year.

·         Members were informed that the Capital expenditure forecast at year end outturn was £135m and the performance against the Medium Term Financial Plan budget was 77%.  This performance was reduced to 59% when compared to the current budget.  This meant that the Council’s borrowing requirement had reduced by 26% compared to the Medium Term Financial Plan budget. 

·         Councillor Shepherd-DuBey questioned the total figure given in Table 2 General Fund capital expenditure and financing, for the 2018/19 Medium Term Financial Plan Budget.  The Financial Planning Specialist agreed to check the figure and has since confirmed that it was correct.

·         There had been some slippage in the delivery of the Capital Programme with 59% of projects achieved this year.  It was confirmed that no projects had been cancelled but that there had been delays in some areas such as delivery of infrastructure and the provision of affordable housing, meaning that spending against those projects had been pushed back.  Councillor Chopping suggested reference be made in the report to the fact that possible delays should be factored into the process as early as possible.

·         In response to a question from Councillor Shepherd-Dubey it was confirmed that the Market Place project would be completed this financial year.

·         The Financial Planning Specialist, confirmed that the Council had not taken new external borrowing in the first six months.  It was being forecasted that the Council would take new loans in the final six months of the financial year but this would be reviewed by the Treasury Management Team and would only be taken out if prudent to do so.

·         The debt charge budget outturn performance was forecast at 88%, which represented an underspend.  The returns on investment budget outturn performance was forecast at 90%, a reduction in income.  This meant that the underachievement of investment returns was being more than covered by the reduction in debt charges.  The underachievement was due to a reduction in loans given to Wokingham Housing Limited.

·         In response to a question from Councillor Smith, the Financial Planning Specialist confirmed that there was the facility for short term borrowing if required.

·         Councillor Shepherd-DuBey asked whether there were any investments that had not performed as well as expected.  The Lead Specialist Finance commented that the Council had a Strategy in place which set out which organisations it could invest with.  The Council mostly invested with other local authorities.

·         In response to a question from Councillor Shepherd-DuBey Officers explained why no figures had been included in Table B9 – Internal Investments: interest received, against HRA internal loan from the General Fund (2018/19 Budget), Wokingham Housing (2018/19 Budget) and Wokingham town centre regeneration loan (2018/19 Budget).

·         Councillor Shepherd-DuBey questioned why the maturity date for the loan from the Local Enterprise Board was 2017.  Officers agreed to look in to this.  It was suggested that this may be an ongoing loan.

·         Councillor Sargeant asked how the Council compared to other local authorities with regards to financial transactions.  Helen Thompson stated that it was not immediately out of line with other local authorities but that it was quite geared towards borrowing. 

·         It was clarified that the properties listed in Appendix D Investment Portfolio were properties that the Council had purchased for income purposes.  There was a strict definition as to what could be classified as an investment property.  Councillor Shepherd-DuBey asked where assets were listed and was informed that there was an asset register.

RESOLVED:  That

1)         the mid-year Treasury Management report for 2018/19 be noted;

2)         the actual 2018/19 prudential indicators within the report, be noted;

3)         the report, subject to the correction of minor errors identified, be recommended to Council for approval.