Issue - meetings

Purpose of Report

To report the Council’s treasury management activity and the actual prudential indicators for the period 1 April 2023 to 30 September 2023, in accordance with the requirements of the Chartered Institute of Public Finance and Accountancy (CIPFA) Code of Practice.

Decision

That the Prudential and Local Indicators and the actual performance against the Treasury Management Strategy 2023/24 for the half-year ended 30 September 2023 be noted.

Alternative Options Considered and Rejected

None.

Reason for Decision

The prudential system for capital expenditure was well established. One of the requirements of the Prudential Code was to ensure adequate monitoring of the capital expenditure plans, prudential indicators (PIs) and treasury management response to these plans. The report fulfilled that requirement and included a review of compliance with Treasury and Prudential Limits and the Prudential Indicators at 30^th September 2023. The Treasury Management Strategy and Prudential Indicators were previously reported to and approved by Council on 28^th February 2023.

It was noted that the Council held £41.145 million of investments at 30 September 2023, with the full investment profile set out at Appendix A of the report. Of this investment portfolio, 100% was held in low risk specified investments, the requirement for the year being a minimum of 25% of the portfolio to be specified investments. During the six months to 30 September on average 93% of the portfolio was held in low risk specified investments and an average of 7% of the portfolio was held in non-specified investments with other local authorities.

It was noted that as at 30^th September 2023, the Council held £114.353m of external borrowing, of which 100% were fixed rate loans (Appendix A referred).

As at 30^th September 2023, the average rate of interest paid during the first half of the financial year on external borrowing was 3.14%. This was lower than the budgeted rate set in the MTFS 2022-27 of 4.25%. There had been a reduction in external borrowing during the first 6 months of the year as some borrowing has been repaid and internal balances used to fund expenditure.

This Council had adopted the CIPFA Code of Practice for Treasury Management in the Public Sector and operated its treasury management service in compliance with this Code and the above requirements. These required that the prime objective of treasury management activity was the effective management of risk, and that its borrowing activities were undertaken in a prudent, affordable and sustainable basis.

This report highlighted the changes to the key prudential indicators, to enable an overview of the current status of the capital expenditure plans. It incorporated any new or revised schemes previously reported to members. Changes required to the residual prudential indicators and other related treasury management issues were also included.