Issue - meetings

The Chair said he was grateful for the work of the finance team for being prudent with the Council’s finances.

The item was introduced by Chris Norton (Head of Investments, Audit, Insurance and Risk). He reminded members treasury investments related to ensuring there was sufficient cash available for the Council to use and differed from pension and non-treasury investments. The primary role of treasury investments was to ensure efficiency and security. Interest, inflation and market rates were all taken into account during treasury management, although these were hard to forecast. The Council had looked to diversify its treasury management portfolio into other local authorities, although it could not invest more than £10million per authority.

The current interest rate of 3.69 per cent was lower than the base rate. Fluctuating interest rates meant the Council’s treasury management rates would lag behind the real time changes to the base interest rate.

Chris Norton said consideration had been given to an early pre-payment for the Pension Fund. However with fluctuating forecasts a decision was taken not to do this, and it had since been proven to be the correct decision. The Council was also looking to realign its borrowing profile. The Council had paid back historical borrowing of £49million.

Responding to a question from Councillor Tim Sinclair, Chris Norton said the Council worked with an independent treasury advisory company to look at low risk investments and to decide what would be an appropriate amount to invest. Investments relating to equities and the Pension Fund were longer term and would seek a higher return of investment. Poor treasury management could have negative consequences and implications for the Council’s overall budget, such as having to increase rates of Council Tax.

Responding to a question from Councillor Rob Tromans, Andy Felton (Director of Finance) said borrowing would be required for the 2025/26 Capital Strategy, and to support the WRIF. The Capital Strategy would assume certain levels of investment.

Members said it was important to get treasury management right. Councillor Pete Gilbert said officers’ management had been exemplary. Members thanked officers for their diligence, particularly noting what was happening with the budgets of other councils.

Members noted the report and voted to endorse its contents.