Annual Report on the Treasury Management Service and Actual Prudential Indicators 2019-20
Meeting: 21/01/2021 - Council (Item 10)
Report of Councillor Sarah Suggitt, Executive Member for Governance & Maxine O’Mahony, Executive Director, Strategy & Governance.
This report was discussed at the Governance & Audit Committee meeting on 17 December 2020 and recommended to Full Council for approval.
Councillor Cowen, the Executive Member for Finance & Growth presented the report.
The two reports had been discussed at the Governance & Audit Committee meeting on 17 December 2020 where both reports at agenda item 9 and 10 had been debated fully. Many questions had been asked and were answered accordingly as could be seen from the Minutes.
The Governance & Audit Committee had recommended various recommendations to Council for adoption.
One matter that had come across in both reports was the significant reduction both now and looking ahead on investment income which demonstrated that interest rates were likely to be held at 0.01% for some considerable time to come.
Alison Chubbock, the Chief Accountant and Deputy S151 Officer was asked to continue with presenting the report.
In summary the first report agenda item 9, it was noted that the Council had not breached any limits, there was no borrowing need and all requirements had been complied with.
For agenda item 10, the Policy and Strategy had not changed from the current year and was fit for purpose.
Accepting that the world was in a very difficult place at the moment, and on-going financial turmoil would surely follow, Councillor Birt had noticed that on page 66 of the agenda pack, revenue funding was going to be halved, however, this was prior to Covid and he asked if the Council had set itself up correctly in the first place.
Members were informed that revenue funding was not used very often and the reason it had been halved was due to the Council committing some funding for broadband for approximately £1m. This was a one-off and hence the halving of the value.
Councillor Crane mentioned the 0.01% interest rates and was interested to know, as the Council had all these assets, what the average income interest rate the Council was receiving from these assets in comparison to what it would get in the bank.
Councillor Cowen stated that it would depend on the asset but as the Council held significant assets across the District and a strategy had been set for what income stream the Council might expect from each of those assets. He was aware that this ranged from between 3% and 5% up to 8% or 9% on the capital effectively that the Council had invested in the buildings. There was the potential to increase the Council’s revenue stream by holding property assets even in these difficult times. Breckland Council would continue to invest in its District in order to grow and provide employment and see away out of the pandemic through further growth and investment throughout the District.
Councillor Atterwill heard what had been said about investment in property portfolios but asked Councillor Cowen if he agreed that there was a certain amount of risk too.
Members were informed that any investment, whoever made it, carried a risk, but that was the reason why the Council had an analysis carried out by the Commercial Property Team and took out a full risk ... view the full minutes text for item 10
Report of Maxine O’Mahony, Executive Director for Strategy & Governance.
Alison Chubbock, the Chief Accountant presented the report.
This was the first of three reports for the Governance & Audit Committee to consider.
The annual report on the Treasury Management Service and Actual Prudential Indicators reported on the previous year’s performance in 2019/20 and was a recommendation to Full Council.
This report would normally be brought to the Committee in the month of June but due to the pandemic the meeting had been cancelled and therefore some of the information contained within the report was out of date.
Members’ attention was drawn to Appendix A. The Chief Accountant advised that some of this information was out of date, but more recent information could be found in one of the reports being considered later on in the agenda.
In summary, Breckland Council had complied with all the requirements in 2019/20, no limits had been breached and no borrowing had been undertaken.
Attention was drawn to Appendix B, on page 48 of the agenda pack.
The capital spend table at section 2.2. showed an actual spend of £4.5m against the budget of £6.4m. This was mainly due to grant funded projects that were continuing in the current year. On page 49, the table showing the actual cash balance compared to the Council’s expected, under section 3.4 of the report, showed a figure of almost £24m compared to estimates of £19m and this was partly due to below budget capital spend and due to differences in balances on debtors and creditors.
The report was otherwise fairly factual, and no questions were asked.
RECOMMEND to Full Council that:
1) the actual 2019/20 prudential indicators within this report be approved; and
2) the Treasury Management stewardship report for 2019/20 at Appendix B and Appendix C of the report be noted.