Agenda item

Report of the Group Director of Operations

The Group Director of Operations submitted a report (previously circulated) to seek Members approval of the revised Treasury Management Strategy, Prudential Indicators and provide Members with a mid-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; and the indicators were set out in three statutory reports namely, a forward looking annual treasury management strategy, a backward looking annual treasury management report and this mid-year update (which follows Council approval in February 2021 of the 2021/22 Prudential Indicators and Treasury Management Strategy).

The key objectives of the three annual 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 £174.081m and the Authorised Limit reduction to £237.156m 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 for 2021/22 due to

schemes that have been estimated to have slipped into future years (around £10.8m) and the Housing programme being delayed due to Covid 19 and it was proposed to set an actual borrowing figure of £164.849m to accommodate the additional borrowing need and any debt requirements for cash flow.

Reference was also made to investments to include £30m in property funds which was expected to increase the net return on investments by approximately £0.700m in future years; and the Treasury Management Budget which was forecast to underspend by £0.243m in 2021/22.

Members discussed the projected base rate increase and how this will impact the authority.

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 underspend in the revised Treasury Management Budget (Financing Costs).