Issue - meetings

Purpose of Report

The annual Treasury Management stewardship report was a requirement of the Council’s reporting procedures under regulations issued under the Local Government Act 2003 and covered the treasury management activities and the actual prudential and treasury indicators for 2018/19.

Decision

That the report be noted and the actual prudential indicators contained within Appendices A and B be recommended to Council for approval.

Alternative Options Considered and Rejected

None.

Reason for Decision

During 2018/19, the Council complied with its legislative and regulatory requirements. The key prudential indicators for the year, with comparators, were set out in paragraph two of the report, with full details of transactions in year and performance against the Prudential Indicators included at paragraph four and Appendices A and B of the report.

The Chief Finance Officer had confirmed that borrowing was only undertaken for a capital purpose and that the statutory borrowing limit and the authorised limit were not breached.

Key issues of activity during 2018/19 were noted as follows:

·         the Council’s total debt, including leases and lease-type arrangements, at 31 March 2018 was £115,696 million compared with the Capital Financing Requirement of £120.131 million. This represented an under-borrowing position of £4.435 million, which was currently being supported by internal resources. Additional long term borrowing would be taken in future years to bring levels up to the Capital Finance Requirement, subject to liquidity requirements, if preferential interest rates were available;

·         the Council’s investments at the 31 March 2019 were £29.2 million, which was £13.6 million higher that at 31 March 2018. Average investment balances for 2018/19 were £22.344 million, which was higher than estimated balances of £14.97 million in the Medium Term Financial Strategy 2018-23 due to the timing of borrowing taken. This referred to the principal amounts of investment held, whereas the investment values included in the balance sheet were based on fair value. In most cases, this would simply be equal to the principal invested, unless the investment had been impaired;

·         actual investment interest earned on balances was £143,000 compared to £77,000 estimated in the Medium Term Financial Strategy 2018-23;

·         the interest rate achieved on investments was 0.77% which was 0.26% above the target average seven day LIBID rate, with the average in 2018/19 being 0.51%.