Agenda item

Report of the Managing Director

The Managing Director submitted a report (previously circulated) to seek Members approval of the revised Treasury Management Strategy, Prudential Indicators and provide Members with a half-yearly review of the Council’s borrowing and investment activities.

It was reported that the mandatory Prudential Code, which governs Council’s borrowing, required Council approval of controls, called Prudential Indicators, which related to capital spending and borrowing. The indicators were set out in three statutory annual reports and the key objectives of those reports were set out in the submitted report, together with the key proposed revisions to the prudential indicators which related to a reduction in the Operational Boundary to £188.018m and the Authorised Limit reduction to £229.233m to allow for any additional cashflow requirement.

With regard to Capital Expenditure, the submitted report highlighted the original elements of the capital programme and the expected financing arrangements of this capital expenditure; and the reduction in Borrowing Need due to the Housing programme being delayed due to Covid 19 and it was proposed to set an actual borrowing figure of £177.660m to accommodate the additional borrowing need and any debt requirements for cash flow purposes.

Reference was also made to investments were to include £30m in property funds which were expected to increase the net return on investments by approximately £0.500m in future years; and the Treasury Management Budget which was forecast to underspend by £0.110m in 2020/21.

The submitted report also highlighted that the authority had received a request from Darlington College to utilise the ‘Loans to External Bodies or Organisations; facility within the Council’s Capital Strategy.

RESOLVED – That the submitted report be referred to Cabinet and that it be advised that this Audit Committee approves the revised prudential indicators and limits and notes the potential of Darlington College accessing the Council’s loan facility in accordance with the Capital Strategy; and notes the underspend in the revised Treasury Management Budget (Financing Costs).