22 Annual Treasury Management Outturn Report
Councillor Pauline Church, Cabinet Member for Finance & Procurement, Commissioning, IT, Digital and Commercialisation, introduced and moved the recommendation as detailed in the report. The proposal was seconded by Councillor Richard Clewer.
The council was required by regulation to provide an Annual Treasury Management Review of activity and credential treasury indicators for the period from 1 April 2020 to 31 March 2021. A variation of the report had been presented to Cabinet.
The council continued to finance capital expenditure through maximising the use of capital receipts, capital grants and internal borrowing, overall enabling the council to under borrow by £176.5m and avoid interest costs of £3.8m.
It was stated that the council undertakes capital expenditure on long term assets and investments, financed immediately through capital or revenue resources with no impact on the Council borrowing need, or if insufficient in ternal funding was available or a decision was taken not to use internal resources, this would give rise to borrowing need.
A summary of the council’s borrowing position on 31 March 2021 was detailed in appendix 1. The council’s treasury position was intrinsically linked with the Capital Programme. When placing treasury transactions in the market, consideration would be given to investments with environmental and social benefits.
The Chairman then invited Group Leaders to comment on the report and
Councillor Richard Clewer thanked Councillor Church and noted that the report had been approved by Cabinet.
Councillor Ian Thorn, Leader of the Liberal Democrat Group, thanked officers for enabling attendance at Council in a safe way and Trowbridge Town Council for hosting the meeting at the Civic Centre. He then noted that it would be helpful to understand the administration’s view in terms of how to ensure the investments were as ethical as possible, in terms of investments with institutions and loans to local authorities. He hoped for a Business Plan which was more specific, and output driven so that we can measure performance in specific ways.
Councillor Graham Wright, on behalf of the Independent Group, thanked Councillor Church for her report.
Councillor Ricky Rogers, Leader of the Labour Group, noted that it was financially reassuring to hear that the Capital Programme would be back on track with future projects and developments.
The item was then opened for general debate.
During debate, there was a request for future reports to set out the criteria relating to social policy objectives.
Other issues raised included the loan repayment rates of 4,5, & 6% in relation to the base rate of 0.1%, and whether there was scope to re-negotiate. The focus on capital borrowing and expenditure was also welcomed.
Councillor Church noted that as much effort as possible was made to ensure that investments were ethical. The Capital Programme needed to be deliverable and have the correct focus for the authority. She was keen for future reports to include a link to the Social Policy Objectives and would liaise with Officers to take this forward.
With regards to high loan rates, those were the rates at ... view the full minutes text for item 22
29 Treasury Management Outturn 2020/21
Report of the Chief Executive.
Cllr Pauline Church, Cabinet Member for Finance and Procurement, Commissioning, IT, Digital and Commercialisation presented the report which provided detail about the Annual Outturn report reviewing the Treasury Management activities from 1 April 2020 to 31 March 2021.
Cllr Church explained that the Council has continued to finance capital expenditure through maximising the use of capital receipts, capital grants and internal borrowing. Overall, the Council is under borrowed by £176.530m, avoiding the payment of external interest costs in the order of £3.884m. It was noted that the Council did not breach any of its performance indicators during 2020/21. However, during the year the Council breached the counterparty limit for the HSBC current account. The limit is £10m and was breached by £1.5m for one day. Details of this breach were detailed in the report and actions have been taken to mitigate the risk of reoccurrence of any such breach.
Cllr Pip Ridout, Chair of the Financial Planning Task Group, confirmed that the report had been considered by the Task Group at its meetings on 7 July 2021. The Task Group were content with the responses received to questions asked and they have included the Capital programme, treasury management and Stone Circle Companies in the Forward Plan of items to consider at future meetings.
In response to questions from Cllr Ian Thorn about (i) A figure for investment returns; (ii) the nature of 3rd party loans; and (iii) ethical investments; Cllr Church responded as follows: (i) this request was noted; (ii) The majority of the 3rd party loans were associated with Lackham College, and a more detailed written response would be provided; (iii) There is an expectation that other Councils receiving investment from Wiltshire Council, would be of a similar standing as Wiltshire Council, and this is tested by the liquidity of the Council, security and their ethical standing.
In response to questions from Cllr Clare Cape about social policy objectives and ethical investing; Cllr Church and the Corporate Director for Resources and Deputy Chief Executive (Section 151 Officer) confirmed that the criteria employed prior to investments of this nature would include issues surrounding security, liquidity, social rights and social policy. These areas automatically restrict how and where investment decisions are made by the council.
a) Noted the contents of this report are in line with the Treasury Management Strategy 2020/21; and to
b) Recommend to Full Council consideration of this report
Reason for decision:
To give members an opportunity to consider the performance of the Council against the parameters set out in the approved Treasury Management Strategy for 2020/21.