Issue - meetings

The Portfolio Holder for Corporate Finance and Resources to submit a report, which provides a summary of the Treasury activities in 2020/21.   The report also covers the actual position on the Prudential Indicators in accordance with the Prudential Code.

Cabinet:

1)    APPROVED the Treasury Management Annual Report for 2020-21 for submission to Council;

2)    NOTED the actual position on Prudential Indicators for 2020-21

Dawn Garton, Director for Corporate Services introduced the report, the purpose of which was to provide a summary of the Treasury activities in 2020/21.  The report also covered the actual position on the Prudential Indicators, in accordance with the Prudential Code.

Mrs. Garton highlighted that no new borrowing had been undertaken in the year and that borrowing had remained within the statutory borrowing limit.  The investment return for the year was disappointing at 0.81% (a further decline on 2019/20’s 1.25%). 

Mrs. Garton advised that the Council's property fund had also shown a fall in valuation.  The investment portfolio continued to incorporate more diversification in terms of counterparty and maturity and as interest rates were currently low, it was not an appropriate time to be locking funds into very long-term investments.  Therefore, the portfolio did not extend beyond 12 months. 

Mrs. Garton confirmed that the report would be submitted to Council for approval, in line with requirements of the Prudential Code.

Councillor Ronnie de Burle, Portfolio Holder for Corporate Governance, Finance and Resources reiterated that all investment rates and returns had been impacted.  To balance this, more diversity was being introduced into the portfolio.  Hopefully, investments would begin to recover and the monies set aside by Council in 2021 mitigated risk and demonstrated prudence.

The Leader noted that the Bank of England’s inflation base rate remained low at 0.1%.

Cabinet:

1)    APPROVED the Treasury Management Annual Report for 2020-21 for submission to Council;

2)    NOTED the actual position on Prudential Indicators for 2020-21

Reason for the decision

It is important that Cabinet are aware of the Council’s Treasury Management performance to ensure they can make informed decisions that protect the Council’s financial assets while taking regard of financial stability and potential returns.

The Annual Treasury Report is a requirement of the Council's reporting procedures.

The report meets the requirements of both the CIPFA Code of Practice on Treasury Management and the CIPFA Prudential Code for Capital Finance in Local Authorities.  The Council is required to comply with both codes through Regulations issued under the Local Government Act 2003.