Agenda item

Purpose of Report

To summarise and review the Council’s treasury management activity and the actual prudential indicators at 31 December 2024, in accordance with the requirements of the Chartered Institute of Public Finance and Accountancy (CIPFA) Code of Practice. The report, therefore, ensured this Council was embracing best practice for the scrutiny of capital and investment activity in accordance with the Code of Practice (CIPFA).

Decision

That the Prudential and Treasury Indicators and the actual performance against the Treasury Management Strategy 2024/25 for the quarter ended 31December 2024 be noted.

Alternative Options Considered and Rejected

None.

Reason for Decision

The Treasury Management position and performance results for the 9 months ended 31st December 2024 were set out in the body of the report and Appendix A (prudential Indicators).

Officers confirmed that the approved limits within the Annual Treasury Management Strategy were not breached during the quarter ended 31st December 2024.

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 the treasury management response to these plans. This report fulfilled that requirement and included a review of compliance with Treasury and Prudential Limits and the Prudential Indicators at 31 December 2024. The Treasury Management Strategy and Prudential Indicators were previously reported to and approved by Council on 27 February 2024.

It was noted that the Council held £17.505 million of investments at 31 December 2024, achieving an average interest rate of 5.13% for the financial year to date (5.11% 2023/24). Actual interest earned in the 9 months period to 31st December 2024 totalled £978k.

100% of the Council’s investment portfolio was held in low risk specified investments, the requirement for the year being a minimum of 25% of the portfolio to be specified investments.

Where possible the Council sought sustainable investments and was working with our advisors on the best way to score banks and funds ESG ratings, whilst balancing this against generating returns that were in the best interest of the tax payer.

It was noted that as at 31st December 2024 the Council held £107.067 million of external borrowing, of which 100% was fixed rate loans

As at 31st December 2024, the average rate of interest paid during the first three quarters of the year on external borrowing was 3.22%.

As part of the Treasury Management Strategy, the Council established a range of Prudential Indicators (in accordance with professional practice) to monitor both Treasury and Capital, as the two were intrinsically linked, as detailed at Appendix A of the report.

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.

The Council’s treasury management activity and the actual prudential indicators at 31 December 2024 conformed with The Local Government Act 2003, the Prudential Code and the Treasury Management Code of Practice which included a key principal that an organisations appetite for risk was included in their annual Treasury Management Strategy and included any use of financial instruments for the prudent management of those risks, to ensure that priority was given to security and liquidity when investing.