Agenda item

Click here to find the recording of this item on YouTube.

The Interim Financial Services Manager presented the Annual Treasury Outturn Report and explained it covers 2023/24. He added the treasury function included borrowing, investing and cash management.

He advised the Committee the Council had formally adopted the Chartered Institute of Public Finance and Accountancy’s Code of Practice of Treasury Management (2017) and remains fully compliant with its requirement.  He added the report meets the requirements of both the CIPFA Code of Practice on Treasury Management, (the Code), and the CIPFA Prudential Code for Capital Finance in Local Authorities, (the Prudential Code).

The Interim Financial Services Manager highlighted the report included the 2023/2024 Treasury Outturn, Compliance with Treasury Limits and the Outturn Summary. He added the Borough Council did not breach any indicators in 2023/24 and the report indicated the market in which the Council operates in. 

The Chair, Councillor Ryves sought clarification on the recommendation of the report which was to note the report however included in the report it stated the report was to be scrutinised.

The Monitoring Officer confirmed the recommendation was to note the report.

Councillor Jamieson referred to page 133 and 136 and sought clarification on the correct gross borrowing figure.  He commented the investments had decreased sharply from £27,113,000 to £7,554,000 and asked if investments of £7,554,000 was enough to maintain solvency.

The Assistant Director Resources and Section 151 Officer confirmed the typo in the report and confirmed the gross borrowing was £15,000,000 due to short-term borrowing towards the end of the financial year. She added if the investments were to continue to remain at £7,554,000 this would not be sustainable to maintain solvency. She explained further an unexpected payment had occurred back to central government at the year end which coincided with a reduction in collection of council taxes which impacted on the cashflow and resulted in the borrowing position at that time.

The Chair brought to the Committee’s attention page 136 and the table at 5.10 including financing cost as a proportion of net revenue stream was blank.

The Assistant Director, Resources and Section 151 Officer thanked the Chair for highlighting and will follow up this figure.

The Chair questioned the authorised limit of £86,000,000 and how it was decided and who decided the limit.

The Assistant Director Resources and Section 151 Officer advised this was an internal calculation which was decided on what was affordable based on capital programme and cash flow and the overall financial implications on the Borough Council.  She explained to the Committee the proposal of £86,000,000 was part of the treasury management strategy which was approved by Council for the financial year. The Assistant Director added the Borough Council has a low amount of borrowing compared to other local authorities and the Office for Local Government have brought in monitoring arrangements for local authorities in financial difficulties.

Councillor de Winton sought the opinion of the External Auditors on the £86 million limit.

The External Auditor commented £86,000,000 limit was low compared to London Borough’s and it varies between local authorities, and it was also dependent on if they maintain the housing stock.

Councillor Jamieson sought clarification on the difference between the Operational Boundary and the Capital Funding Requirement (CFR)

The Assistant Director, Resources and Section 151 Officer responded to Councillor Jamieson question and confirmed it was from the capital programme due to major projects not being delivered in the time frame.  She added work had been carried out to refine the capital programme and maintaining control of the projects being delivered.

Councillor Morley, Portfolio Holder for Finance advised only 8% of the capital programme was spent at the end of this quarter. He added there was our own limitations on what can be produced and delivered as part of the major projects.

The Chair referred to page 142 and sought clarification on what GBR- 1 month, meant.

The Assistant Director, Resources and Section 151 Officer advised she would follow up with this information.

Councillor Devulapalli highlighted page 144, section 9.2 and sought clarification it was safe to loan £6 million to other local authorities. She asked what the position was going forward. 

The Assistant Director Resources and Section 151 Officer provided context to the Committee on the process around loans to other local authorities. She added local authorities do not have a credit rating to assess level of risk. However, being aware of the local authorities which were in financial difficulties and given due consideration was important but there was no guidance or regulations around local authorities being bankrupt.

In response to the Chair, the Assistant Director Resources and Section 151 Officer explained the figures were taken from statement of accounts. She explained the statements of accounts highlighted the cash balances, reserves fund, general fund balance however she added it does not reflect what the cash balance at that time as it would be utilising it as working capital.

RESOLVED: The Audit Committee noted the annual treasury outturn position for 2023/2024.