Issue - meetings

Chris Norton (Strategy and Commissioning Manager – Treasury, Pensions, Audit, Insurance and Risk) provided an overview of the report and gave clarification of what the report included.

The committee noted the following highlights –

·        Warwickshire County Council is in a strong financial position at the moment with strong reserves.   A key aspect of the strategy is borrowing more than is needed to but this allows the council to be more efficient.

·        Rates of return are rising naturally due to interest rates. 

·        The rate of return on long term investments are strong.

·        There is an option to potentially pre-pay financial investments on pension plans for the next three financial years

Councillor Robert Tromans stated that he was pleased to hear that treasury management is taking a prudent and low risk approach; more about safety than squeezing out a slightly higher percentage with a higher risk.    Following a question from Councillor Tromans in relation to the total capital expenditure showing as different figures on two tables in the report, Chris Norton confirmed that he would look into it and get back to the committee.

Chris Norton continued and confirmed that the security risk is about making sure the council doesn’t lose money.  The strategy approves rules that officers have to stick too and sets out certain standards must be met; diversifying portfolios to ensure that the money is there when it is needed at the right time.

The committee noted the challenges set out in the report and that council tax revenues are not a material issue for the council’s cash flows.  It was noted that there is a significant risk on the treasury side; what will happen with interest rates is an uncertainty at the moment.  Making judgements can be a small or high risks.

Following a question from Councillor Sarah Boad in relation to whether the council had over-borrowed and if it was worth it, Chris Norton confirmed that over-borrowing is done due to due to fixed term debts with fixed interest rates and the compensation that would have to be paid if the debt was repaid early.  Officers can then use the funds from over-borrowing to top up portfolios

Resolved

The Committee notes and comments on the 2023/24 Treasury Management Strategy approved by Council on 7 February 2023.