Agenda item

Treasury Management Report - June 2022

Report number: FRS/WS/22/004



The Sub-Committee received Report number FRS/WS/22/004, which provided a comprehensive assessment on investment activities for West Suffolk Council from 1 April 2022 to 30 June 2022.


The Council held investments of £66,500,000 as at 30 June 2022.  Interest achieved in the first quarter of the financial year totalled £90,077.11 against a budget for the period of £11,250.


External borrowing as at 30 June 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 £41,536,828 as at 30 June 2022.  Overall borrowing, both external and internal was expected to increase over the full financial year.


Borrowing costs (interest payable and MRP) for the year were forecast to be £1,090,606 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 per cent target average rate of return on investments.


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; PWLB rule changes; and market information.


Finally, officers explained that future reports would include a section on “liability benchmark”.  At the end of 2021 a CIPFA consultation was issued with a proposal to include a new indicator for the “liability benchmark” in the Treasury Management Code.  The liability benchmark was effectively the net borrowing requirement of a local authority, plus a liquidity allowance over the long-term life of any external loans.  This showed the funding position of a local authority after taking into account reserves and the working capital cash position.  It then measured current and committed external borrowing against that need and reflected the current capital programme.


The Sub-Committee scrutinised the report in detail and asked questions to which responses were provided. 


In response to a question raised around future borrowing, officers explained that based on evidence available today, the Council was not looking to borrow externally over the next 12 months, but if interest rates significantly dropped, officers will revisit that decision.


In response to a question raised relating to covid grants, officers explained that the Council had finished paying out covid business grants.  However, there was a holding balance on some schemes and once reconciled, would be paid back to the Government.


The Sub-Committee referred to table 6.4, on page 22 of the report (summary of capital borrowing budget 2022 to 2023) and suggested including a timeline setting out the projected start/completion date for each capital project, which officers agreed to look into further.


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




That subject to the approval of Cabinet and Council, the Financial Resilience Report (June 2021), being Report number FRS/WS/21/004, be approved.

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