Agenda item

2022/23 Mid-Year Treasury Management Strategy Review

For Audit Committee to consider the Mid-Year Treasury Management Strategy Review (as contained in Appendix A), the revisions to the original 2022/23 Treasury Management Strategy, and to note the treasury activities to date.


John Robinson presented the report as set out in the agenda pack. He noted that there had been significant changes in the economy since the report was written and that things remain likely to change on a daily basis, however, reminded members that this report is about the Council’s position although he noted that the emerging changes would have an impact on the Council’s position.


Questions included:

·  M Burnett – On p.13 there is an £8 million increase in Capital Grants. Are we likely to receive these grants?

o  J Robinson – Due to the cycle in which this report is produced we build an estimate in during the budget stetting process in January, we then find out after April time if we have been successful with a number of the grant so this explains why there is an increase as we have a clearer position now as we move further into the financial year and the plan.

·  M Burnett – On p.14 item 2.2 a number of new schemes have been added. Are there any more details you can give us?

o  J Robinson – It is not really for the treasury management strategy to govern capital programmes; those would go to the relevant portfolio holders for approval as we go through but there are indeed a raft of new schemes added to the capital program every year as we get new grant funding. The point you mention I believe refers to the fact we went through a procurement process for our strategic environment contract which identified that by the Council owning the vehicles it would be more cost effective. There are of course a number of other schemes on the program, it sits at around 70-80 schemes at any one time of which I don’t have the details of all of them to hand but we can provide that to you if you would like it.

ACTION: John Robinson to send through the list of the capital program schemes.

·  Cllr A Sandison – Why has the capital expenditure on non HRA increased £20 million.

o  J Robinson – This is again due to the additional schemes that weren’t approved in January. As we move through the year and the position on grants become clearer it is not unusual to see an increase.

·  Cllr A Sandison – On item 4.1 you state the Council has approved a strategy of borrowing in advance of need. Is that not quite difficult when you don’t know what the future needs might be?

o  J Robinson – That is our exact policy – we don’t know what the need is. The policy states you can borrow in advance of need, however, we don’t because of the risk around of that. In fact we are actually borrowing £100 million short of what we need as we are using our cash balances to effectively manage the cashflow. If you look at the 10 year future programme there is a lot of uncertainty around that and borrowing around those would be risky, so we have a prudent approach where we manage in effect what we know at the moment.

·  Cllr A Sandison – The interest rates have also changed since this report was written.

o  J Robinson – Yes, they have, they are rumoured to change again speculation is that they will reach as high as 6%.

·  M Burnett – Are you expecting an update from your advisors (Link) on the state of the market following the uncertainty.

o  J Robinson – Yes, this week.


·  Cllr R Long – Is the Council’s borrowing for this year at a fixed rate?

o  J Robinson – The Council hasn’t took up any new borrowing this year, the last round of borrowing we undertook was fixed at 2.01% which is looking favourable.

·  Cllr R Long – The PFI PPP Scheme is referred to as the long-term liabilities, is that primarily the schools? If so, what is the term on that?

o  J Robinson – Yes it is likely to be the historic balances from schools on the new builds. I don’t know the term but would be happy to come back to you on that.

ACTION: J Robinson to confirm the length of the term.


Decision Recommended:

The Committee is asked to recommend that Council approves the revised forecasts for the 2022/23 Capital Financing Requirement of £490.060 million, Authorised Limit of £510.194 million and to note the Operational Boundary and treasury activity to date.



The Committee unanimously agreed to recommend that Council approves the revised forecasts for the 2022/23 Capital Financing Requirement of £490.060 million, Authorised Limit of £510.194 million and noted the Operational Boundary and treasury activity to date.




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