The Service Manager (Finance and Performance)
presented Report No: PAS/FH/18/028, which:
(a)
Presented the Council’s Annual Treasury Management Report,
summarising the investment activities for the year 2017-2018;
and
(b)
Provided a summary of the investment activities for the first three
months of the 2018-2019 financial year.
(a)
Annual Treasury Management Report 2017-2018
The
Council’s Annual Treasury Management Report for 2017-2018 was
attached as Attachment 1 to Report No: PAS/FH/18/028. The report included tables which summarised the
interest earned during 2017-2018 on the various treasury
investments held by the Council; investment activity during the
year; investments held as at 31 March 2018, as well as information
on market activities; borrowings; temporary loans; and average rate
of return.
The budgeted income
from investments in 2017/2018 was £181,000 (average rate of
return of 0.75%). The interest actually
earned during the year totalled £118,328 (average rate of
return of 0.71%). This was an under
achievement in interest of £62,671 (an under achievement of
0.04% on the average rate of return).
The under
achievement of interest earned was primarily due to reduced funds
available for investment following the purchase of the Solar Farm
at Toggam Farm where internal funds were being used in the short
term to save on external borrowing costs. This combined with the continuing low rates of
return offered by our counterparties had resulted in this under
achievement.
The
Committee scrutinised the Annual Treasury Management Report
2017-2018, and did not raise any questions.
It was then proposed
by Councillor Simon Cole, seconded by Councillor John Bloodworth,
and with the vote being unanimous, it was:
RECOMMENDED:
That, subject to
the approval of Council, the Annual Treasury Management Report for
2017-2018, attached as Attachment 1 to Report No: PAS/FH/18/028, be
approved.
(b)
Investment Activity 1 April to 30 June 2018
The
total amount invested at 1 April 2018 was £16.005m and at 30
June 2018 it was £19.005m. The
increase in balances over the period was due primarily to timing
differences in respect of collection of local taxes; Council Tax
and Non-Domestic Rates and payments of precepts i.e. to Suffolk
County Council, Suffolk Police and central government.
The
2018-2019 Annual Treasury Management and Investment Strategy
Statements sets out the Council’s projections for the current
financial year. The budget for
investment income in 2018-2019 was £224,000 which was based
on a 0.75% target average rate of return on investments.
At
the end of June 2018, interest earned during the first quarter
amounted to £29,440 (average rate of return 0.66%) against a
profiled budget of £56,000, creating a budgetary deficit of
£26,559. The deficit was due to
lower cash balances as a result of rephrasing of some income
generating projects.
The
report also included for the 2018-2019 budget new assumptions on
borrowing for capital projects included within it. The borrowing was based around seven specific
projects:
-
West Suffolk Operational Hub
-
Mildenhall Hub
-
Barley Homes – Loan facility
-
Investing in our Growth Agenda Fund
There was also the
long-standing £4.0m loan relating to ...
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