Agenda item

Report of the Managing Director

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

The submitted report stated that the mandatory Prudential Code, which governs Council borrowing, required Council approval of controls, called Prudential Indicators, relating to capital spending and borrowing. It was reported that the Prudential Indicators were set in three statutory annual reports to Council, and the submitted report followed the Council’s approval in February 2020 of the 2020/21 Prudential Indicators and Treasury Management Strategy.

The submitted report highlighted that the key objectives of the three annual reports were to ensure that governance of the large amounts of public money under the Council’s Treasury Management activities complied with legislation and met the high standards set out in the codes of practice, to ensure that borrowing was affordable, and to report performance of the key activities of borrowing and investments.

The submitted report also outlined revisions to the Prudential Indicators in terms of a reduction to Operational Boundary to £188.018M, and a reduction to the Authorised Limit to £229.233M to allow for any additional cashflow requirement. It was noted that investments now included £30M in property funds, which were expected to increase the Council’s net return on investments by around £0.500M in future years.

RESOLVED – (a) That the revised prudential indicators and limits within the report in Tables 1 to 6, 8, 11 and 13 to 18 be approved.

(b) That the proposal detailed in Paragraph 32 of the submitted report, in relation to the potential of Darlington College accessing the Council’s loan facility in accordance with the Capital Strategy, be noted.

(c) That the underspend in the Treasury Management Budget (Financing Costs) of £0.110M, as detailed in Table 12, be noted.

REASONS – (a) In order to comply with the Prudential Code for Capital Finance in Local Authorities.

(b) To inform Members of the performance of the Treasury Management function.

(c) To comply with the Local Government Act 2003.

(d) To enable further improvements to be made in the Council’s Treasury Management function.