Issue - meetings

This mid-year report has been prepared in compliance with the Chartered Institute of Public Finance and Accountancy’s (CIPFA) Code of Practice on Treasury Management and covers the activities to 30 September 2023. It enables the Audit and Governance Committee to scrutinise the report prior to making comment to Full Council.

During the period to 30 September 2023, the Council complied with its legislative and regulatory requirements, including confirmation that the authorised limit was not breached.

[20 Minutes]

Upon the invitation of the Chair, the Group Head of Finance and Section 151 Officer introduced the report. He explained he was presenting this on behalf of the Senior Accountant (Treasury). This mid-year report had been prepared in compliance with the Chartered Institute of Public Finance and Accountancy’s (CIPFA) Code of Practice on Treasury Management and covered the activities to 30 September 2023. It enabled the Audit and Governance Committee to scrutinise the report prior to making comment to Full Council.

Investment income continued to perform well, with an expected investment income of £460k over budget. Interest rates remained high, however they were expected to reduce in due course. The Council were also due to repay unused energy support grants, which the Government gave to Councils in advance to provide  households with financial support during the financial crisis. This money had been invested, thus increasing the Council’s investment returns, but the next major repayment of money was due in 30 days’ time.

Arun still had no external borrowing outside of the Housing Revenue Account.  The Group Head of Finance and Section 151 Officer highlighted pages 38-40, which showed the prudential and treasury indicators. The Capital Finance Requirement (CFR) was the amount of capital expenditure that needed to be funded through borrowing. The CFR was set out on page 38, and the level of borrowing (table 4.4 on page 37) showed actual borrowing to be far less than the CFR figure. This meant Arun that had ‘under borrowed’ which was a good thing, because it meant that it was able to fund capital expenditure through balances such as energy payment grant money, capital tax precepts, business rates, which Arun could take advantage of whilst the money was in their bank account. Under borrowing negated the need to take out new borrowing, and was not unusual for local authorities to do. Arun had a very robust cash flow forecast model. Page 39, table 5.6 explained the borrowing limits. Arun had 2 borrowing limits which the Council were statutorily obliged to set. The limits were down to the Council to decide. These were the Operational borrowing limit, which was the maximum amount of borrowing that the Council would operate within and the Authorised borrowing limit, which gave the Council some headroom should it be required. Officers were not permitted to allow borrowing to exceed this limit. Arun was well below the Operating borrowing limit, which represented a good position for the Council. He then highlighted section 6 starting on page 40, which gave a general economic update.

Members were then given the opportunity to ask questions. Clarification was sought on the 14.8 million figure under Net borrowing in the table on page 39. The Group Head of Finance and Section 151 Officer explained this figure was the difference between total borrowing and investments, so our net position was that we had more investments than we were borrowing.

It was asked where the money from investments would go. The Group Head of  ...  view the full minutes text for item 445