Agenda item

Annual Treasury Management and Financial Resilience Report 2020 to 2021

Report number: FRS/WS/21/003



The Sub-Committee received Report No: FRS/WS/21/003, which reported on the investment activities of West Suffolk Council from 1 April 2020 to 31 March 2021.


The 2020 to 2021 Annual Treasury Management and Investment Strategy Statements, approved on 25 February 2020, set out the Council’s projections for the current financial year.  The budget for investment income in 2020 to 2021 was £131,000, which was based on a 0.65% target average rate of return on investments.  At the end of March 2021, interest actually earned during the financial year totalled £96,767 (average rate of return of 0.354%), against a budget for the year of £131,000; a budgetary deficit of £34,233. 


The Annual Treasury Management and Financial Resilience Report (2020 to 2021) included tables summarising the interest earned and the average rate of return achieved; treasury management investment activity during the year; investments held as at 31 March 2021; capital borrowing budget 2020 to 2021; borrowings and temporary loans.


The report included assumptions on borrowing costs for the capital projects included within it and was based around four main projects:


-      West Suffolk Operational Hub;

-      Mildenhall Hub;

-      West Suffolk Operational Hub; and

-      Investing in our Growth Fund.


During the financial year there had been no requirement to borrow externally, due to the Authority’s cash balances, over and above the long-standing £4m loan relating to the Newmarket Leisure Centre.  Therefore, the only interest payable for the year was £169,600 relating to this loan. The total borrowing (expressed as the Authority’s capital financing requirements) between both internal and external (£4m) total £49.4m at 31 March 2021.


The report also included at Appendix A the CIPFA Financial Resilience Index 2021.  The index showed a Council’s position on a range of measures associated with financial risk.  The graphs showed West Suffolk Council within the context of neighbouring Councils within Suffolk.


The Sub-Committee scrutinised the Annual Treasury Management and Financial Resilience Report 2020 to 2021, and asked questions to which responses were provided.  Discussions were held on the Councils asset base and rental income; and the merits of currently borrowing internally verses externally to fund capital projects.


In response to a question raised relating to the Mildenhall Hub project, the Sub-Committee was advised that the Council had made an assumption in the business case that it would be funded by external borrowing.  However, the Council was able to fund the project internally (from cash balances) so there was no interest payable at present.  The only physical cost to the Council through borrowing internally was the loss of interest receivable.  


In response to a question raised on how comparable the Council was with its Band D council tax compared to other Suffolk authorities, the Sub-Committee was advised that the Council was working through its harmonisation plan between the former Councils (Forest Health District Council and St Edmundsbury Borough Council).  The national average Band D, without Parish/Town Council precepts was £195.


It was then proposed by Councillor Elaine McManus, seconded by Councillor Ian Houlder, and with the vote being unanimous it was:




That subject to the approval of Cabinet and Council, the Annual Treasury Management and Financial Resilience Report (2020 to 2021), being Report number FRS/WS/21/003, be approved.



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