The Sub-Committee received Report No:
TMS/SE/18/003 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 Appendix 1 to Report No: TMS/SE/18/003. 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 and investments held as at 31 March 2018.
The
budget income from investments in 2017-2018 was £253,000
(average rate of return 0.55%).
Interest actually earned during the year totalled £292,825
(average rate of return of0.571%); an over-achievement in interest
of £39,825, and an over-achievement of 0.021% on average rate
of return. The over-achievement of
interest earned was primarily due to higher cash balances being
held during the year than originally budgeted for.
The
Sub-Committee scrutinised the Annual Treasury Management Report
2017-2018, and asked questions to which responses were
provided.
In
response to a question raised regarding the over-achievement in
interest earned, member were informed that a key contributor was on
money held to support the Councils capital programme. To try and overcome timing issues, officers were
carrying out profiling work to phase out capital spend across a
projects life rather than to place it all into the first year of
the project.
It
was proposed by Councillor David Roach, seconded by Councillor
Patricia Warby and with the vote being unanimous, it was
RECOMMENDED:
That the Annual Treasury Management Report 2017-2018, attached as
Appendix 1 to Report No: TMS/SE/18/003, be approved
(b)
Investment Activity 1 April to 30 June 2018
The
total amount invested at 1 April 2018 was £36.35m and at 30
June 2018 it was £40.15m. 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 £308,000 which was based
on a 0.70% target average rate of return on investments.
At
the end of June 2018, interest earned during the first quarter
amounted to £68,693 (average rate of return 0.636%) against a
profiled budget of £77,000 (average rate of return 0.70%),
creating a budgetary deficit of £8,306. The deficit related to lower than anticipated
interest rates offered by lenders.
The
Service Manager (Finance and Performance) explained that the
Council’s Treasury Advisors had advised on increasing the
interest rate to 0.70%. However, the
Council was currently not meeting that rate, but officers were
working towards achieving this.
The
report also included for the first time, assumptions on borrowing
for capital projects included within it. The borrowing was based around four specific
projects as per ...
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