Agenda item

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The Financial Services Manager presented the report and reminded the Committee that the Council had formally adopted the Chartered Institute of Public Finance and Accountancy’s (CIPFA) Code of Practice on Treasury Management (revised 2021) that remained fully compliant with its requirements.  One of the primary requirements of the Code was receipt by Council of a quarterly Review Report.

The Committee was informed that the Quarterly Review report had been prepared in compliance with CIPFA’s Code of Practice, and covered the following:

·        A review of the Treasury Management Strategy.

·        The Council’s capital expenditure (prudential indicators).

·        An economic update for the first six months of 2023/2024.

Additional Supporting Information:

·        Appendix 1 – Economic Update.

·        Appendix 2 – Interest Rates forecasts.

·        Appendix 3 – Prudential and Treasury Indicators for 2023/2024.

·        Appendix 4 – Investment Portfolio.

·        Appendix 5 – Approved countries for investment.

The Chair, Councillor Ryves thanked the Financial Services Manager for the report and invited comments and questions from the Committee, a summary of which is set out below.

The Financial Services Manager provided clarification on how internal borrowing was defined.

Councillor Dark informed the Committee that the Corporate Performance Panel had previously received a presentation on the Council’s investments and referred to a recent article in the media on ethical investments by another local authority and asked how regularly the council reviewed its investments noting that the last report had provided reassurance to Councillors at that point.

The Financial Services Manager explained that Appendix 5 set out the approved countries for investments as at 30 June 2023 and was presented to Cabinet and Full Council in February of each year.  The Committee was advised that the list could be reviewed at any time but normally practice was on an annual basis.

In response to questions from Councillor de Winton relating to Environmental Social Governance Reporting, the Financial Services Manager explained this was not currently set out as a priority in the Council’s Treasury Management Strategy.  The Assistant Director, Resources commented that this was a hot topic for local authorities but was not a mandatory requirement at this time.  ESG was in its early days of development and the Council would continue to monitor the guidance and take into account any actions which may be required in future reports.  The Assistant Director, Resources advised that clarification would be sought on the timeframe and be brought back through the correct democratic process.

Under Standing Order 34, Councillor Beales commented  the Council was responsible to the taxpayer for public money and this responsibility did not change whatever the political leadership may be.

Councillor Dark added that these were comments made by Councillors under the previous Administration relating to investments using a lot of public money that may be placed in companies/areas that were questionable. Officers had provided a satisfactory response at that time but it may be prudent for the Council to undertake another review of the investment portfolio.

At the invitation of the Chair, the Portfolio Holder for Finance advised that ESG was mentioned at the previous meeting and the Assistant Director, Resources had provided an explanation. 

The Portfolio Holder for Finance drew the Committee’s attention to page 66 and the capital expenditure budget approved by Council in February 2023 £58m and the actual spend as at 30 September 2023 £12m and commented that the Council was continuously overestimating the capital programme and asked if there was headroom to review the programme.  In response, the Financial Services Manager confirmed the figures as set out in the report and advised that the increased frequency of reporting on a quarterly basis would enable the performance indicators to be picked up to see if there was an increase, exceedance or lower spend than that forecast.

The Financial Services Manager responded to questions from the Chair on the income received on the Council’s investment portfolio.

In response to a question from Councillor Bearshaw, the Financial Services Manager confirmed that the Council’s maximum borrowing limit was £81m.

The Financial Services Manager and Assistant Director, Resources responded to further questions from Councillor Bearshaw on the funding of the Capital Programme.

RESOLVED:  The Committee noted the report and the treasury activity.