Issue - meetings

To consider the report of the Interim Chief Finance Officer, (copy enclosed).

The Committee considered the report of the Interim Chief Finance Officer reporting on the Council’s investment activity for the 2022 / 23 financial year in accordance with the Chartered Institute of Public Finance and Accountancy Treasury Management Code (CIPFA’s TM Code) and the Council’s Treasury Management Policy and Treasury Management Practices (TMPs).

It was noted that the CIPFA Code of Practice required authorities report on the performance of the treasury management function at least twice yearly.  The report provided detail in respect of the following areas:

·                External Context – Appendix 1 to the report provided an overview of the external economic environment, prepared by the Link Group, engaged by the Council to provide treasury management consultancy and advice services.  The Link Group had also provided a summary in respect of the outlook for 2023 / 24 which was set out in the report.

·                Local Context – The Council was currently debt-free, and its capital expenditure did not include external borrowing during 2022 / 23.  However, it was noted that this position could change in the future.

·                Investment Activity (April 2022 – March 2023) – Members were advised that the level of investments held by the Council had seen an increase during this period and the report highlighted the reasons for this.  The Council continued to take a prudent approach in relation to investment with priority being given to securing and liquidity over yield. 

·                Performance – Budgeted Income and Outturn – The average income returns on the Authority’s investments were detailed along with the overall investment for the year.  Members noted that the overachievement was due to interest rates increasing throughout the financial year.

·                Compliance with Prudential Indicators and Treasury Management Strategy - As set out in Appendix 2.  It was noted that apart from some breached bank limits (set out in the report) all treasury management activities were fully compliant and all prudential indicators had been complied with to date.

In response to questions raised, the Interim Chief Finance Officer provided the following additional information:

·                The Council carried out its own monitoring of Authorities and kept a list of those it was would not invest in.

·                The continued high interest rates were factored into the budget following the advice of the Council’s Treasury Management Advisors and would be monitored throughout the year.

·                The Council did have some investment in Easleigh Council, however this had been made before the press activity which would be taken into consideration going forward.

·                The Council had re-procured its Treasury Management Advice Services and the Link Group appointed over Arlingclose (the Council’s previous contractor).  The Officer advised that she would provide Members with details of the contract amount outside of the meeting.  It was noted that the Link Group provided a framework for investment with the Council’s risk appetite but did not invest for the Council.

The Chairperson moved the recommendation set out in the report and this was duly agreed.

RESOLVED that the Treasury Outturn report be noted for compliance purposes.