257 Treasury Management – Quarter 1 report 2024/25 PDF 436 KB
During the first quarter to 30 June 2024, the Council complied with its legislative and regulatory requirements, including confirmation that the authorised limit was not breached.
[20 Minutes]
Minutes:
[During this item, the Chair, Councillor Stanley redeclared his Personal Interest in this Item as an employee of Nationwide Building Society]
Upon the invitation of the Chair, the Senior Accountant Treasury presented the report to the Committee, explaining it was the Quarter 1 Treasury Management report which updated on activities up to the end of June 2024. She highlighted pages 86 and 87 which provided information on the economic situation and interest rate forecasts from the treasury advisors. Their forecast on 28 May 2024 indicated that the Bank of England Base rate would reduce to 4% by March 2025 and would rest at 3.25% by March 2026, however they were currently looking to revise this forecast.
Appendix 1 provided information on the investment position at 30 June 2024 and the Senior Accountant Treasury highlighted some key points as follows: the table in 1.4 showed investments held were £48m, this had been £42.77m on 31 March 2024, this change was largely to do with the timing of payments such as precepts which were paid on 05 July 2024; the average level of funds held throughout the quarter was £44m; 1.11 - performance against the budget was positive by 0.52%, which was largely due to better rates than expected in the budget; 1.12 - outturn was expected to achieve over £2m in investment income, which was around £140k above budget at June, but this had improved since; 1.14 - The IFRs 9 International Financial Reporting Standard (page 95) override was in place until 31 March 2025, but should it not have been in place the valuations on our CCLA funds at June would have meant an adverse impact of £477k on the Council’s revenue budget.
Appendix 2 provided information on the Councils borrowing position and the Senior Accountant Treasury highlighted some key points as follows: there had been no new external borrowing in Quarter 1; the only external borrowing was for the HRA self-financing settlement (£70.9m initially to £35.45m currently) of rates between 3.21% and 3.48% for maturity loans
Appendix 3 provided information on the Prudentials Indicators.
The recommendation was proposed by Councillor Tandy and seconded by Councillor Wallsgrove.
The Chair invited questions and debate and it was asked why ADC were investing in local authorities when it was known these were struggling. The Group Head of Finance explained no Councils had actually gone bankrupt, and local authorities were still considered to be a safe investment.
The Committee
RECOMMEND TO FULL COUNCIL that
2.1. the Quarter 1 treasury management report for 2024/25 be noted;
2.2. the treasury activity for the quarter ended 30 June 2024, which has generated interest receipts of £563,000 (5.15%) against a budget of £1,896,310 (4.63%), be noted; and
2.3. the quarter 1 prudential and treasury indicators for 2024/25 contained in the report be noted.