Issue - meetings

Treasury Management Outturn 2020/21

Meeting: 28/09/2021 - Audit Committee (Item 18)

18 Treasury Management Outturn 2020/21 pdf icon PDF 1 MB

To note the Treasury Management Outturn Report 2020/21 and Annex 1 and provide any observations to the Executive at its meeting on 18 November 2021.

Additional documents:

Minutes:

The Interim Head of Finance gave an overview of the treasury management function, explaining that treasury management covered the management of the Council’s cash and borrowing, as compared to budget management which focussed on controlling spending and income. The Council was required to have a balanced revenue budget whereby all expenditure was covered by income suggesting a neutral annual cash flow, therefore income would equal expenditure, however surpluses/shortfalls were held, either due to short term mismatches of spending and income flows, or as part of a deliberate strategy and this was explained. These cash sums were then reported at the end of the year on the balance sheet.

 

The Capital Financing Requirement (CFR) was a key element of treasury management and this set out how the capital programme would be funded over coming years. This was usually through a combination of grants, asset sales and borrowing. That borrowing had an impact on the revenue budget that includes funding for loan interest costs and sums set aside for principal repayment (known as the Minimum Revenue Provision or MRP). Management of the Council’s cash balances and borrowing were the two key elements of treasury management. The governance of Local Authority treasury management was outlined as were the treasury management reporting requirements.

 

An overview of the Treasury Investment Strategy and borrowing plans was given, as was the delegation of responsibility for Treasury Management. It was highlighted that the Audit Committee’s role was the scrutiny of Treasury Management Strategy and performance. The Committee would be consulted each year on development of the new Treasury Management Strategy. In anticipation of preparing the Treasury Management Strategy for 2022/23 in-depth training for the Committee would be arranged, with support from the Council’s treasury advisors, Link, in the new year.

 

The Treasury Management Outturn report provided an update on the performance of the Council’s treasury management activities for the last financial year and was part of the formal reporting requirements under the CIPFA Code of Practice on Treasury Management. It was stated that with one with one exception, the Council complied with legislative and regulatory requirements and operated within the limits specified in the Treasury Management Strategy. As previously reported to Overview and Scrutiny Committee and Executive throughout last year, the exception related to periods of time during the year when the Government paid over tens of millions of pounds in emergency funding to the Council at short notice as part of the national COVID-19 pandemic response. As a result, it had not been possible to spread the funds across a range of banks and financial institutions as was normally required, to ensure compliance with the limits for how much was invested with individual institutions as set out in the Treasury Management Strategy. However, this had now been resolved mainly through opening additional accounts with new institutions to spread the counterparty risk.

 

It was questioned as to the number of additional accounts that were opened and their lifespan. Further information regarding this would be provided in a written  ...  view the full minutes text for item 18


Meeting: 16/09/2021 - Executive (Item 31)

31 Treasury Management Outturn 2020/21 pdf icon PDF 1 MB

Deputy Leader and Portfolio Holder for Finance and Governance.

Additional documents:

Decision:

RECOMMENDED TO COUNCIL:

 

1.    To note the Treasury Management Performance for 2020/21.

 

2.    To approve the outturn against the 2020/21 Prudential and Treasury Management Indicators and the Annual Treasury Management Report (Annex 1 to the Executive report).

Minutes:

The Deputy Leader and Executive Member for Finance and Governance, Councillor Schofield, introduced the report which provided an update on the performance of the Council’s treasury management activities for the last financial year.

 

Apart from one exception, the Council had complied with legislative and regulatory requirements. The exception related to periods of time when the Government paid significant emergency funding to the Council at short notice as part of the pandemic response. It had not been possible to spread those funds across a range of banks and financial institutions as was required to ensure compliance with the limits set in the Council’s Treasury Management Strategy. This had been resolved through opening additional accounts at other institutions.

 

Councillor Schofield explained that the report, which showed the Council’s treasury management activity was on track and complied with the limits previously approved by members, would be submitted to the Audit Committee on 28 September.

 

The Leader of the Council, Councillor Brunt, thanked the Interim Head of Finance and her team for responding rapidly to the unusual challenge that had presented itself as a result of the Government grants throughout the pandemic.

 

RECOMMENDED TO COUNCIL:

 

1.    To note the Treasury Management Performance for 2020/21.

 

2.    To approve the outturn against the 2020/21 Prudential and Treasury Management Indicators and the Annual Treasury Management Report (Annex 1 to the Executive report).