Issue - meetings

The Cabinet Member for Finance, Growth and Investment introduced the Treasury Management Annual Report 2015/16 which set out the Council’s outturn position in respect of its treasury management activities during the year.

The Cabinet Member referred to the to the Council’s  borrowing strategy and in particular the agreed £150m loan from the European Investment Bank (EIB) secured at a considerably lower rate of interest than that of even the Public Loans and Works Board (PWLB). He reminded the Assembly that the Council had already drawn down £89m of the loan as part of the Gascoigne redevelopment. The remaining £61m would continue to be available to the Council and would be released once suitable regeneration projects had been identified.

With regard to borrowing, the Council was taking advantage of very low interest rates available at the present time, for which there were plans to develop/invest in up to 21 sites in the Borough. 

The Cabinet Member outlined the investment decisions taken by the Council during the year which showed that rates of return for the Council had consistently outperformed both London and national averages helping to protect the Council during times of austerity.

Furthermore, the Council had a clear strategic plan in place including paying down ‘old’ debt taken out at significantly higher rates of interest in the past. 

The Assembly resolved to:

(i)  Note the Treasury Management Annual Report for 2015/16;

(ii)  Note that the Council complied with all 2015/16 treasury management indicators;

(iii)  Approve the actual Prudential and Treasury Indicators for 2015/16;

(iv)  Approve the amendments to the counterparty limits as set out in section 4.4 of the report;

(v)  Note that the Council borrowed £50m from the Public Works Loan Board (PWLB) in June 2016 to fund capital expenditure;

(vi)  Agree to maintain the delegated authority to the Strategic Director for Finance and Investment, in consultation with the Cabinet Member for Finance, Growth and Investments, to continue to proportionally amend the counterparty lending limits agreed within the Treasury Management Strategy Statement to take into account the additional cash holdings resulting from borrowing from the European Investment Bank and the PWLB;

(vii)  Agree to borrow the remaining £61m from the European Investment Bank as soon as suitable regeneration projects are identified;

(viii)  Delegate authority to the Strategic Director Finance & Investment, in consultation with the Director of Law & Governance, and the Cabinet Member for Finance, Growth and Investment, to negotiate terms with the EIB; and

(ix)  Authorise the Director of Law and Governance, or an authorised delegate on her behalf, to execute all of the legal agreements, contracts and other documents on behalf of the Council.

The Cabinet Member for Finance, Growth and Investment introduced the Treasury Management Annual Report for 2015/16 which set out the key areas of performance during the year. 

The Cabinet Member referred to the higher than predicted investment and interest earnings in 2015/16 but explained that the recent ‘Brexit’ vote was likely to mean that, going forward, interest rates would fall below the Council’s predicted level and, therefore, impact negatively on interest earnings.  The immediate impact of ‘Brexit’ had, however, provided an opportunity to secure additional long-term funding at low rates of interest, with £20m having been borrowed from the Public Works Loan Board (PWLB) in the days immediately following the EU Referendum which was on top of £30m borrowed earlier in the month. 

In response to questions, the Cabinet Member advised that the funding previously secured via the European Investment Bank was secure although the ‘Brexit’ vote may impact on the success of any future applications for EIB funding.  The Cabinet Member also confirmed that the Council’s cash balance would reduce as the major Capital Programme and Ambition 2020 projects were implemented.

Cabinet resolved to recommend the Assembly to:

(i)  Note the Treasury Management Annual Report for 2015/16;

(ii)  Note that the Council complied with all 2015/16 treasury management indicators;

(iii)  Approve the actual Prudential and Treasury Indicators for 2015/16;

(iv)  Approve the amendments to the counterparty limits as set out in section 4.4 of the report;

(v)  Note that the Council borrowed £50m from the PWLB in June 2016 to fund capital expenditure; and

(vi)  Maintain the delegated authority to the Strategic Director for Finance and Investment, in consultation with the Cabinet Member for Finance, Growth and Investments, to continue to proportionally amend the counterparty lending limits agreed within the Treasury Management Strategy Statement to take into account the additional cash holdings resulting from borrowing from the European Investment Bank and the PWLB.