The Sub-Committee received report number
FRS/WS/22/005, which provided a comprehensive assessment on
investment activities for West Suffolk Council from 1 April 2022 to
30 September 2022.
The Council held investments of
£78,000,000 as at 30 September 2022. Interest achieved in the first half of the
financial year totalled £317,734 against a budget for the
period of £22,500.
External borrowing as at 30 September 2022 was
£13,875,000, a reduction of £125,000 from 1 April 2022
(this relates to the repayment plan for the recent PWLB £10m
40-year loan), with the Council’s level of internal borrowing
increasing slightly to £41,699,661 as at 30 September
2022. The overall borrowing (weighted
towards internal) was expected to increase over the full financial
year.
Borrowing costs (interest payable and MRP) for
the year were forecast to be £1,069,488 against an approved
budget of £2,268,350 although this could change if more
external borrowing was undertaken than was currently forecast.
The 2022 to 2023 Annual Treasury Management
and Investment Strategy Statements sets out the Council’s
projections for the current financial year. The budget for investment income for 2022 to 2023
was £45,000 which was based on a 0.25 percent target average
rate of return on investments, set prior to the current economic
situation.
The report also included a summary of
borrowing activity during the period; borrowing strategy and
sources of borrowing; borrowing and capital costs –
affordability; borrowing and income – proportionality;
borrowing and asset yields and market information.
The Service Manager (Finance and Procurement)
informed the Sub-Committee that the Council had received a letter
relating to the Thurrock loan, which explained that all
inter-authority loans would be paid back with interest. Therefore, the Council would be receiving its loan
back in early December 2022.
The Sub-Committee scrutinised the report in
detail and asked questions to which responses were
provided. In particular discussions
were held on the current interest rate rises; the solar farm yield
for 2021 to 2022 and the Barclays £4m loan.
In response to a question raised on what
happened to the additional interest received on cash balances,
officers advised that this was used towards funding council
services in year or placed in the council’s interest
equalisation reserve to assist further years fluctuations in
interest receivable.
In response to a question raised regarding the
£10m loan, officers advised that the £10m load would
meet the Council’s overall financing capital
requirement. The list of projects which
it could be used for were set out on pages 12 – 13 of the
report.
In response to a question raised regarding the
interest rate rises and whether the interest achieved would close
the budget gap, rather than cutting services, officers explained
that the Performance and Audit Scrutiny Committee on 17 November
2022 would receive a detailed report on the current position on
closing the budget gap for 2023 to 2024.
It was then proposed by Councillor Robert
Nobbs, seconded by Councillor Victor Lukaniuk, and with the vote
being unanimous, it was:
RECOMMENDED:
That subject to the
approval of ...
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