Agenda item

Report number: FRS/WS/22/003 was considered by the Financial Resilience Sub-Committee on 11 July 2022.

The Service Manager (Finance and Performance) will update the Committee verbally on any issues or recommendations arising from the consideration of this report.

The Committee received report number FRS.WS.22.003, which had been considered by the Financial Resilience Sub-Committee on 11 July 2022.    The report set out West Suffolk Council’s Annual Treasury Management and Financial Resilience Report for 2021 to 2022, which included tables summarising the interest earned and the average rate of return achieved during 2021 to 2022; investment activity during the year; investments held as at 31 March 2022; borrowing and temporary loans and capital borrowing budget 2021 to 2022.

The budget for investment income in 2021 to 2022 was £45,000 which was based on a 0.25% target average rate of return on investments.  Interest actually earned during the financial year totalled £96,451.98 (average rate of return of 0.395%), against a budget for the year of £45,000; a budgetary surplus of £49,451.98.  The report included assumptions on borrowing for the capital projects included within it and was based around the following main projects:

-      Western Way development;

-      Mildenhall Hub;

-      West Suffolk Operational Hub;

-      Toggam Solar Farm; and

-      Investing in our Growth Fund.

The report also included a summary of the capital borrowing budget for 2021 to 2022; borrowing and income – proportionality; borrowing and asset yields. 

During the financial year 2021 to 2022 the councils underlying need to borrow in investing in its communities increased by just over £6m.  With £10m of external borrowing taken out in the year, the level of internal borrowing has reduced by £3.9m.  This would help to reduce the level of interest rate risk the council was currently exposed to.

The Sub-Committee had 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 £10m external loan and how would the Council rebuild its cash balances over the longer term.

The Performance and Audit Scrutiny Committee considered the report and asked questions to which responses were provided.  In particular discussions were held on who decided on which bank(s) the council placed its money for investment; the asset value of the solar farm; and at what point would the council look at selling the solar farm if income decreased significantly.

In response to a question raised relating to the £10m external loan and whether it was being used for a specific reason, officers referred the Committee to paragraph 4.7 on page 13 of the report which set out the council’s capital finance requirements.  This was made up of all projects based on the need to borrow externally.  To date, the council had been able to use internal cash available.  The £10m would be used towards that capital finance requirement.

Members did not raise any issues at this time to be brought to the attention of Cabinet. 

Councillor Phil Wittam then moved the recommendation, which was duly seconded by Councillor Robert Nobbs and with the vote being unanimous, it was

          Recommended

That subject to the approval of Cabinet and Council the Annual Treasury Management and Financial Resilience Report 2021 to 2022, being Report number: FRS/WS/22/003, be approved.