The Cabinet considered a report of the Executive Director (Finance and Resources) presenting the Annual Treasury Management Report covering the treasury activity for the period from April 2019 to March 2020 and reviews performance against the Prudential Indicators for 2019/20.

Resolved:

1. That the Annual Treasury Management Report for 2019/20 and the outturn Prudential Indicators for 2019/20, be approved.

2. That it be noted that the financing of 2019/20 capital expenditure of £59.451m has been funded in accordance with the schedule set out in Table 1 of section 4 of the submitted report.

3. That it be noted that the Capital Financing and Treasury Management were carried out in accordance with statutory requirements, good practice and in compliance with the CIPFA (The Chartered Institute of Public Finance and Accountancy) Prudential Code during 2019/20.

4. That it be noted that the loan and investment portfolios were actively managed to minimise cost and maximise interest earned, whilst maintaining a low level of risk.

5. That it be noted that £2.174m of interest and income distributions were received during 2019/20. The total investment income (including the movement on the unit price of externally managed funds) was £0.882m, giving a combined return of 0.70%. This is 0.16% over the average 7 day LIBID rate (London Interbank Bid Rate) and 0.02% under the average bank base rate as set out in Section 7 of the report.

6. That it be noted that the level of borrowing from the Public Works Loan Board (PWLB) (excluding debt relating to services transferred from Essex County Council on 1^st April 1998) increased from £267.8m to £310.3m (Housing Revenue Account (HRA): £75.0m, General Fund (GF): £235.3m) by the end of 2019/20.

7. That it be noted that the level of financing for ‘invest to save’ schemes decreased from £8.73m to £8.64m by the end of 2019/20.

Other Options

There are many options available for the operation of the Treasury Management function, with varying degrees of risk associated with them. The Treasury Management Policy aims to effectively control risk to within a prudent level, whilst providing optimum performance consistent with that level of risk.

Reasons for Recommendations

The CIPFA Code of Practice on Treasury Management recommends that Local Authorities should submit reports regularly. The Treasury Management Policy Statement for 2019/20 sets out that reports would be submitted to Cabinet quarterly on the activities of the treasury management operation.

Note: This is an Executive Function

Eligible for call-in to: Policy and Resources Scrutiny Committee

Cabinet Member: Cllr Woodley