Issue - meetings

The Cabinet Member for Finance, Performance and Core Services presented a report on the Treasury Management 2021/22 Mid-Year Review.

The review report provided details of the mid-year position for treasury activities and highlighted compliance with the Council’s policies previously approved by the Assembly on 3 March 2021 as part of the Treasury Management Strategy Statement for 2021/22.

The Cabinet Member commented that the focus of the report was on the broader economic picture not just in terms of the UK but globally.  These were unprecedented times and the UK economy was facing significant pressure in terms of Brexit, Covid and climate issues. All of those would influence both the borough and the Council either directly or indirectly via inflationary pressures and borrowing rates.

The Assembly resolved to note:

(i)   The Treasury Management Strategy Statement Mid-Year Review 2021/22;

(ii)   The economic update covering the increase in inflation and the potential for an increase in the Bank of England Base Rate;

(iii)   That the value of the treasury investments and cash as at 30 September 2021 totalled £170.2m and that the treasury investment strategy outperformed its peer group, with a return of 1.51% against an average of 0.24% for London Local Authorities (as at 30 June 2021);

(iv)   That the value of the commercial and residential loans lent by the Council as at 31 March 2021 totalled £171.5m;

(v)   That the total borrowing position as at 30 September 2021 totalled £1.0 billion, with £331.2m relating to the Housing Revenue Account and £669.1m to the General Fund;

(vi)   That interest payable was forecast to be £12.6m against a budget of £13.6m, representing a surplus of £1m;

(vii)   That interest receivable was forecast to be £8.2m against a budget of £6.5m, representing a surplus of £1.7m;

(viii)   That capitalised interest was forecast to be £6.5m against a budget of £5.0m, representing a surplus of £1.5m;

(ix)   That Investment and Acquisition Strategy income was forecast to be £4.9m against a budget of £6.6m, representing a deficit of £1.7m; and

(x)   That in the first half of the 2021/22 financial year the Council complied with all 2021/22 treasury management indicators.

Further to Minute 84 (15 February 2021), the Cabinet Member for Finance, Performance and Core Services introduced a report on the mid-year review of the Council’s treasury management activities for 2021/22.

The Cabinet Member summarised the key issues and achievements and confirmed that the Council had complied with all 2021/2 treasury management indicators, policies and statutory requirements.  He also praised the Council’s Treasury team for achieving an overall surplus of £2.4m against targets and significantly outperforming its peer group with an investment return of 1.61% compared to the London average of 0.24%.

Cabinet resolved to recommend the Assembly to note:

(i)  The Treasury Management Strategy Statement Mid-Year Review 2021/22;

(ii)  The economic update covering the increase in inflation and the potential for an increase in the Bank of England Base Rate;

(iii)  That the value of the treasury investments and cash as at 30 September 2021 totalled £170.2m and that the treasury investment strategy outperformed its peer group, with a return of 1.51% against an average of 0.24% for London Local Authorities (as at 30 June 2021);

(iv)  That the value of the commercial and residential loans lent by the Council as at 31 March 2021 totalled £171.5m;

(v)  That the total borrowing position as at 30 September 2021 totalled £1.0 billion, with £331.2m relating to the Housing Revenue Account and £669.1m to the General Fund;

(vi)  That interest payable was forecast to be £12.6m against a budget of £13.6m, representing a surplus of £1m;

(vii)  That interest receivable was forecast to be £8.2m against a budget of £6.5m, representing a surplus of £1.7m;

(viii)  That capitalised interest was forecast to be £6.5m against a budget of £5.0m, representing a surplus of £1.5m;

(ix)  That Investment and Acquisition Strategy income was forecast to be £4.9m against a budget of £6.6m, representing a deficit of £1.7m; and

(x)  That in the first half of the 2021/22 financial year the Council complied with all 2021/22 treasury management indicators.