Issue - meetings

2.55

Report by the Director of Finance

The report sets out the Treasury Management activity undertaken in the first half of the financial year 2019/20 in compliance with the CIPFA Code of Practice.  The report includes Debt and Investment activity, Prudential Indicator monitoring and forecast interest receivable and payable for the financial year.

The Committee is RECOMMENDED to:

a)               note the report, and

b)              recommend Council to note the Council’s Mid-Term Treasury Management Review 2019/20.

Recommendations agreed

Tim Chapple summarised the report.  The Council achieved an average in-house return for the period of 0.93%, below the budgeted rate of 0.98% set in the strategy.  This was because the expected increase in interest rates did not happen.  However, due to higher than budgeted cash balances, income receivable will be at least the level budgeted. Dividends from external funds and interest payable are in line with the budget.

Members raised a number of points and Officers responded as follows:

·         Because the Treasury announced an increase of an extra 100 basis points over Gilts to PWLB rates in October, the Council was able to benefit from higher interest rates from lending to other local authorities. However, this also makes any borrowing the Council needs to do in the future more expensive.

·         Although all the main parties are promising increases in spending, most analysts do not predict an increase in interest rates.

·         The strategy for borrowing provides an option to fund new or replacement borrowing up to £100m through internal borrowing.  We have only just gone into an internal borrowing position.

RESOLVED: to

a)           note the report, and

b)           recommend Council to note the Council’s Mid-Term Treasury Management Review 2019/20.