Issue - meetings
Annual Treasury Management Report: 2016/2017 and Investment Activity 1 April to 30 June 2017
Meeting: 19/09/2017 - St Edmundsbury Cabinet (Item 364)
PDF 220 KBReport No: CAB/SE/17/043
Portfolio Holder: Ian HoulderLead Officer: Rachael Mann
Decision:
RECOMMENDED TO COUNCIL (26 September 2017):
That the Annual Treasury Management Report for 2016-2017, attached as Appendix 1 to Report No: TMS/SE/17/003, be approved.
Minutes:
The Cabinet considered Report No: CAB/SE/17/043, which sought approval for the Annual Treasury Management Report for 2016/2017.
Councillor Ian Houlder, Portfolio Holder for Resources and Performance, drew relevant issues to the attention of the Cabinet, including that the Annual Treasury Management Report for 2016/2017, which was attached at Appendix 1 to Report No: TMS/SE/17/003, summarised the interest earned during 2016/2017 on the various treasury investments held by the Council; investment activity during the year and the investments held as at 31 March 2017.
The budgeted income from investments in 2016/2017 was £277,484 (average rate of return of 0.90%). Interest actually earned during the year totalled £417,358 (average rate of return of 0.763%); an over achievement of interest of £139,876, but an under achievement of 0.137% on average rate of return. This was primarily due to higher cash balances being held during the year than originally budgeted for.
On 4 August 2016, the Bank of England reduced its base rate to 0.25%, where it remained for the rest of 2016/2017 and the bank’s Funding for Lending Scheme also remained open during the year. Consequently, interest rates offered by institutions remained low which resulted in a lower average rate of return being achieved by the Council during 2016/2017 than originally predicted. The Council, in February 2005, agreed to establish the Interest Equalisation Earmarked Reserve to help smooth out these fluctuations in returns. The balance in this reserve, as at 31 March 2017, was £359,630.
Recognition was given to those involved in the production of the Annual Treasury Management Report 2016/2017.
RECOMMENDED TO COUNCIL:
That the Annual Treasury Management Report for 2016-2017, attached as Appendix 1 to Report No: TMS/SE/17/003, be approved.