To note a report from the Executive Member for Finance, Change, and Governance.

The Executive Member for Finance, Change and Governance presented the Treasury Management Annual Performance 2023-24 report. The report outlines the main treasury management activities undertaken during 2022-23 as follows:

·        All legislative and regulatory requirements, including all treasury management prudential indicators have been complied with.

·        The average level of external debt and interest rate payable for 2022/23 was £318.2m and 2.71% and this compares to £332.8m & 2.82% in 2021/22.

·        The average level of treasury investments for 2022/23 was £119.6m with a rate of return of 2.27% compared with 2021/22 when the equivalent figures was £122.0m and 0.35% respectively.

The outturn position for the Council's Treasury Management function was a favourable outturn of £6.97m resulting from a revision to the Minimum Revenue Provision (MRP) policy as agreed at the 15th February 2023 Council Meeting, which provided a saving of £4.29m in year, and from higher than expected returns on short-term investments due to increases in interest rates which resulted in a favourable £2.70m above budget. A contribution has been made towards the Interest Rate Smoothing Reserve of £500k to absorb a potential increase in borrowing costs over the short-term.

The Executive Member informed Members that the report is a complex and detailed report. Reference was made to recent Local Government training on Treasury Management and it was stressed at that training how important it is that all Councillors are cited on Treasury Management Accounts, and Governance. Some training for Members had been provided by the Council on Credential Indicators but the Executive Member advocated to make sure all Trafford Councillors have access to training to enable Members to ask appropriate questions around risk and finances. The Accounts and Audit Committee had received this report on the previous Wednesday.

The Executive Member informed Members that in 2022-23 the Council had achieved compliance of its legislative and regulatory requirements in respect of economics, position, debt investments and credential indicators and no beaches had occurred.

The Executive Member made particular reference to the reasons for the recommendations as follows:

The report is a mandatory report which has been produced in order to comply with the requirements of the Council’s Financial Procedure Rules which incorporate the requirements of both the CIPFA Prudential Code for Capital Finance and the CIPFA Code of Practice on Treasury Management.

With reference to a query on £12 million shown in the Asset Investment Programme referred to at Appendix D Breakdown of Investments, The Director of Finance and Strategy 151 Officer informed Members that it was a treasury investment associated with the Albert Estate in Manchester which is part of the overall investment Strategy Portfolio. It was done as a treasury investment at the time as it fitted the criteria. With regard to the reasoning as to why this money sits in the Investment Portfolio and is also being used as loaning money, Members were informed that in this instance it is the way it is financed. It is categorised as treasury investment and has approved by Council. I response to a request, the Director would respond to Members with the background information on this matter.

RESOLVED: That the report be noted.