Issue - meetings

Treasury Management Half Year

Meeting: 13/12/2023 - Resources and Fire & Rescue Overview and Scrutiny Committee (Item 11)

11 Treasury Management Half Year pdf icon PDF 287 KB

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The item was introduced by Chris Norton (Head of Investments, Audit and Risk). He said £49million of debts had been repaid, which meant the amount of borrowing was now under £300million and had delivered a significant revenue saving to support the MTFS. Cash balances had fallen below £400million, which meant the Council was now able to borrow against its internal resources instead of having to go to an external loan board. Investments had been made in housing associations to improve the portfolio’s diversification, and other investments had been withdrawn from other funds that were no longer considered suitable. Good returns on investments were being generated, as they were low risk.


Chris Norton said there had been the option to pre-pay pension fund contributions over 90 per cent. The decision had been taken not to do this due to the volatility of the market, and this had transpired to be a sensible choice. There were £200million in loans to other local authorities outstanding, but there had been no defaults on keeping up with any payments despite financial challenges across the sector.


Responding to a question from Councillor Sinclair, Chris Norton said it was difficult to make any predictions and the Council’s strategy did not rely on having to make market forecasts. The main issues relating to treasury investments were the security of the cashflow, and its liquidity as this would ensure money was available to finance what it was needed for. Andy Felton said it was anticipated interest rates would remain high for the foreseeable future, and the Council’s cash balance would start to come down over time.


Members noted the contents of the report.

Meeting: 09/11/2023 - Cabinet (Item 4)

4 Treasury Management Half Year Monitoring Report pdf icon PDF 287 KB

A report that provides an update to Cabinet on Treasury Management.


Cabinet Portfolio Holder – Councillor Peter Butlin

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Councillor Peter Butlin, Portfolio Holder for Finance and Property introduced this report, noting that with the continued increase in interest rates and volatility of gilt rates, this six-monthly review of the Council’s treasury management activity was more exciting than usual. Since last reported at the 2022/23, outturn there had been a net cash outflow from the organisation of £67m, mainly due to the repayment of £49m of the Council’s long-term borrowing.  Consequently, long term borrowing had reduced to £272m at the 30 September 2023, and the repayment returned a £1.93m net discount, which could be released over the next 10 years and was part of the Council’s Medium Term Financial Strategy savings. The repayment also reduced the Council’s debt repayment concentration period in the 2050’s and returned some debt headroom.  High interest rates had also returned £8.89m against a budget of £1.8m, which was also fundamentally helping offset the service overspends highlighted in reports. This was anticipated to continue into the second half of the year but would potentially start to reduce from 2024/25 as cash balances and interest rates inevitably reduced, but a level of shorter-term benefit was built into the Medium Term Financial Strategy refresh from higher interest rates. Councillor Butlin went on to explain that as a result of the high interest rates, a decision was taken not to make an early pension fund payment, as more could be earned by the Council investing the money itself, compared to the discount rate offered by the pension fund. This also meant the Council maintained a level of flexibility over cashflow as well, as it was not locked in for three years, which would have been the case with a pension fund early payment option.  Councillor Butlin added that non-treasury investments were well below where they were expected to be by this point in the year due to agreed Warwickshire Recovery Investment Fund investments not having been physically made, but approvals were in place to use the current year’s PIF and BIG pillar allocations, subject to the final deals being signed.


Councillor Andy Crump welcomed the report and expressed gratitude to the team for providing this contribution to the budget and freeing up resources to fund services.  Similarly, Councillor Seccombe welcomed the news ahead of what was a challenging budget.


Councillor Butlin expressed his own thanks to the team and indicated that the reason reserves had been available for allocation was due to their excellent management, enabling the Council to balance the budget for the year.  Looking ahead, with due diligence, the Council would manage the Medium-Term Financial Strategy going forward.




That Cabinet notes the update on Treasury Management activity and performance in respect of the first 6 months of the 2023/24 financial year.