Agenda item

This report provides Governance & Audit Committee with the details of the Council’s Treasury Management activity for the financial year 2023/2024.

The Deputy Chief Executive, Section 151 Officer presented the report which detailed the Treasury Management activity for the financial year 2023/24.  The Committee had received and approved quarterly Treasury updates during the year.  The Council had approved a annual Treasury Management Strategy on 1 March 2023 which was the framework within which the Council operated.

The Deputy Chief Executive, Section 151 Officer referred the Committee to the summary at page 123 of the report. The largest debt was within the Housing Revenue Account (HRA) when the Council had bought itself out of the subsidy system for the HRA and the debt was being repaid over the agreed period.  There was also a change of movement between the long-term and short-term debt as shown in the summary.

There had been a significant improvement in the base rate which had improved the income achieved from budgeted investments.  The provisional outturn was £1.6m, an additional £832K in excess of budget.  This had been achieved through a combination of attaining higher interest rates and the placement of investments for longer durations.  

The Council had also invested in the CCLA (Church, Charities and Local Authorities) Property Fund which invested in property on behalf of the Council.  The value of the fund fluctuated in line with property market values but this was a long-term investment and currently stood at £2.529m as at 31 March 2024.  The primary reason for investing in the fund was the quarterly dividend payment which provided a significantly higher return than other investments.  The dividend payable for the year was £132,677.91 which equated to a 4.40% return on the initial investment of £3m.

The total amount of variable rate investments had decreased slightly between 31 March 2023 and 31 March 2024 and had reduced from £18.629m to £18.420.  Members were referred to the graphs starting at the end of page 119 of the report which detailed the investments and duration.

The Council’s treasury advisers, Link provided benchmarking of comparative information across all their clients which help the Council to understand how its investment portfolio was performing in relation to others so that there was minimal risk to the Council.

The Committee were drawn to paragraph 3.18 of the report and the table showing each quarter analysis of the Council’s average rate of return compared to the other District Councils within the comparative group.  The Council was slightly higher than its peers and this was down to each Council’s individual decision making and how its money was invested.

During 2023/24 the Council had placed more emphasis on ESG (Environmental, Social and Governance) Investments and this would continue in 2024/25 to maintain at least 10% of the portfolio for this type of investment.  The Council had received significant returns during 2023/24 which were above and beyond those expected which had helped to keep the financial reserves balanced.

The Deputy Chief Executive, Section 151 Officer was thanked for the report and it was proposed, seconded and AGREED to approve the annual report on Treasury Management activity for 2023/2024.

Decision

That the Governance and Audit Committee approves the annual report on Treasury Management activity for 2023/24.