The Committee received Report No:
FRS/WS/19/004, which had been scrutinised in detail by the
Financial Resilience Sub-Committee on 18 November 2019. The Chair of the Sub-Committee provided a verbal
update on the Sub-Committee’s consideration of the report,
which summarised the treasury management investment activities for
the first six months of 2019-2020.
It was reported that the total amount invested
at 1 April 2019 was £42,750,000 and at 30 September 2019,
£46,900.000.
The 2019-2020 Annual Treasury Management and
Investment Strategy Statements, sets out the Council’s
projections for the current financial year. The budget for investment income for 2019-2020 was
£142,141 which was based on a 0.90% target average rate of
return on investments.
As at 30 September 2019, interest actually
earned during the first six months of the financial year amounted
to £194,249, against a profiled budget for the period of
£71,070 a budgetary surplus of £123,179. The surplus related to higher than expected cash
balances due to slippages in the Capital programme and also the
favourable interest rates secured on the investments carried over
from the previous councils.
As at the end of September 2019 a total of
£14.5m had been borrowed internally from available cash
balances. This had meant the Council
had not had any additional borrowing over the long-term £4
loan.
The report included assumptions on borrowing
for the capital projects included within it, alongside the current
£4m external borrowing in respect of the previous Newmarket
Leisure Centre building. This new
borrowing requirement was based around three specific projects, as
per their agreed business cases:
-
West Suffolk Operational Hub, Bury St Edmunds
-
Mildenhall Hub
-
Investing in our Growth Fund.
The report also included a summary of the
capital borrowing budget for 2019-2020; a summary of capital
borrowing for quarter two; borrowing and income –
proportionality; current borrowing and other market considerations
(central government’s announcement on 9 October 2019 to raise
the margin applied to Public Works Loans Board (PWLB) loans by
1%).
At the beginning of the year it was assumed
that the council would need to borrow £63.4m for
investments. However, the forecasted
borrowing assumption had decreased to £39m for the financial
year 2019-2020.
The Sub-Committee had scrutinised the report
in detail and asked a number of questions to which comprehensive
responses were provided.
The Committee considered the report and
discussed the low interest rates; investing in properties; and the
solar farm to which responses were provided.
Councillor Ian Houlder then moved the
recommendation, this was duly seconded by Councillor Peter
Thompson, and with the vote being 9 for, 1 against and 1
abstention, it was
RECOMMENDED:
That subject to the
approval of Council, the Treasury Management Report –
September 2019, being Report No: FRS/WS/19/004, be approved.