Agenda item

Annual Treasury Management Review

The report provides the Committee with the details of the Council’s treasury management activity for the financial year 2021/22.


The Assistant Director of Finance presented the Treasury Management Annual Report for 2021/22 which met the requirements of both the CIPFA Code of Practice on Treasury Management and the CIPFA Prudential Code for Capital Finance in Local Authorities.


The Annual Treasury Management Strategy was approved by Council on 1 March 2021 and a mid-year treasury update was approved by the Governance and Audit Committee at the meeting on 26 January 2022.  The report before Members was the annual review following the year end and described the activity compared to the strategy.


Member’s attention was drawn to the table on page 31 which summarised the Council’s Treasury position as at 31 March 2022.  The Council had a fixed rate debt of £89.435m as at the 31 March 2022, £3.221m was repayable within the next 12 months.


The investment position for both short and long term investments as at 31 March 2022 stood at £89.6m, of which £65m was fixed rate investments and £24.6m were variable rate investments.   Variable rate investments had reduced over the last 12 months due to interest rates on notice accounts being inferior to fixed rate investments.   When monies were invested, rates were reviewed to maximize the rate of return but taking into consideration the risk to those investments and also the liquidity position.  Investments were only made following advice from Link Treasury advisors.


Members were referred to paragraph 2.7 of the report which concerned the £3m investment with the CCLA Property Fund, which invested in property. It was a long term investment where the fluctuation risks could be managed over the period of the investment.   As at 31 March 2022 the investment stood at £3.2m which was an improvement on the previous year of £2.7m.   The main reason for investing in the fund was the quarterly dividend received which was significantly higher than the return on other investments.  The dividend payable for the year was £104k which was a 3.5% return on the investment.


Member’s attention was then drawn to the graphs within the report that dealt with the duration and counterparties of investments as at 31 March 2022.  The table contained in paragraph 2.11 showed the average rate of return compared with other District Council’s within the comparable groups which showed that at Quarter 4 South Kesteven at a 0.79% average rate of return compared to 0.54% for other authorities.  In paragraph 2.12 appendix 1 should be appendix A.


The outlook for 2022/23 shown at paragraph 2.13 had been provided by LINK treasury advisors and remained uncertain.  The base rate was increasing faster than anticipated and it was expected that this would be reflected in the interest rates.


All investments placed during 2021/22 had been repaid on the dates agreed and all cash liquidity requirements had been met throughout the year.  Investment income levels had exceeded the original estimated levels set in the budget and rates were higher than originally estimated.  It was confirmed that Performance Indicators set had been achieved.


The Officers were thanked for the report.


Questions were asked in respect of how the impacts on the treasury management would be addressed going forward and how the housing debt were fairing to which the Assistant Director of Finance replied.


It was proposed, seconded and AGREED to note and approve the content of the annual report on the Treasury Management Activity for 2021/22.




That the content of the annual report on the Treasury Management Activity for 2021/22 is noted and approved.

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