To note a report from the Director of Finance and Systems.

The Executive Member for Finance Change and Governance presented the Treasury Management 2023-24 Mid-Year Performance Report. This report gives Members a summary of the Treasury Management activities undertaken for the first half of 2023/24 as follows;

Debt Activity:

·         The level of external debt fell from £318.1m at 31 March to £303.1m at 30 September 2023,

·         Gross loan interest costs totalling £8.4m are to be contained within the current year budget provision,

Investment Activity:

·             The level of investments reduced from £70.4m at 31 March to £69.4m at 30 September 2023,

·              Estimated external investment interest to be earned for 2023/24 of £3.39m is £0.97m above the £2.42m current year budget requirement,

·         The average rate of return achieved during the period April to September 2023 was 4.72%, or 0.14% below the comparable performance indicator of average 1 Month Sterling Overnight Index Average (SONIA) interest rate of 4.86%.

Prudential indicators:

·         The Council complied with its legislative and regulatory requirements and

·         There were no breaches of prudential indicators.

The Executive Member drew attention for the need for each Member to feel confident about asking questions on Technical subject matters and informed Members that there will be training available in January for all Members in relation to Prudential Indicators and Treasury Management.

I response to a query regarding external debt to finance and in year borrowings and regarding the £36million debt which moves through the years to 2025-26 to £717 million and was this the best way to deal with this debt and, how much of the 18 Public Works Loan Board loans are at the 9 per cent rate.

The Finance and Statutory S151 Officer informed Members that on the phasing of borrowings what we are mindful of doing is reflecting where the capital programme and the asset Strategy projections are going and that what we are doing so it’s a reflection of when our planned spend, particularly that spend that’s financed by borrowing is going to take place and that is a reflection of delivery of projects. Regarding debt costs, the table in the report that indicates what our average interest rates are on or debt at the end of September Paragraph 4.1 of the report refers. So we are looking at at average rate of 2.55 per cent. The majority of our debt is at the lower rates of interest as opposed to high given where the average rate is. He would  confirm the exact number to Members following the meeting.

On a query regarding the operational boundary for external debt investment strategy being £375 million and the reference to authorisation for $500 million borrowing and also what is meant by under borrowed, the Finance and Statutory S151 Officer informed Members that the $375 million reflects our budgeted need in 2023-24 so it doesn’t reflect what is already gone. The overall value of the investment fund is still £500 million. Some of this might be undertaken in 2022-23 and that is the reason why it is not showing £500 million. Regarding the term under borrowed, each time the authority has a requirement to borrow in respect of any capital expenditure or an investment through the asset strategy, if we do not borrow it becomes badged as under

borrowed. This can then be taken up as necessary and the Council’s cash flow dictates if we need to do that. A lot of activity comes through short term investments so in some cases we can live with that under borrowing for a period of 12-24 months when the investment might get repaid.

RESLOVED: That the Treasury Management activities undertaken in the first half of 2023-24 be noted.