Issue - meetings

Report of the Executive Manager – Finance and Corporate Services

The Financial Services Manager presented the report of the Executive Manager – Finance and Corporate Services for Treasury Management, Mid- Year Report 2019/20. The report summarised the Council’s capital and investment activities for the period 1 April to 30 September 2019.

The Financial Services Manager advised the Group that growth in the UK economy was below market expectations, the Bank of England base rate is 0.75% and is forecast to remain low for the foreseeable future. The uncertainty in respect of BREXIT negotiations and the forthcoming General Election remains high and the economic growth consequences of BREXIT remain speculative with regards to the UK’s future trade relations with the EU and the rest of the world.

In respect of the Council’s Investment Income, the Financial Services Manager advised that a combination of base rate forecasts, constraints on the lending list and the expenditure expected to be incurred on the Capital programme meant the Council had budgeted to receive £285,000 in investment income in 2019/20. The actual interest earned to 30 September 2019 totalled £129,050 with total receipts for the year expected to be £483,000. The Financial Services Manager explained that interest receipts are higher than estimated due to investing in higher and more diverse interest earning funds and delays in the capital programme. It was noted, that all investments have been made in accordance with the Council’s Treasury Management Strategy.

In addition, the Financial Services Manager gave reference to a table in the report that highlighted a list of financial institutions, amounts invested, length of investment, interest yield and different time periods, thus balancing cash flow and risk. It was noted that Council, at its meeting on 11 September 2019, agreed to consider its carbon footprint and currently 24% of the Council’s portfolio is invested in diversified funds, which invest in equities that carry a small risk of fossil investments. The Financial Services Manager added that fossil free investments portfolios are likely to outperform standard investments therefore the Council’s investments will inevitably shift to non-fossil based investments.

It was RESOLVED that the Capital and Investment Management position as at 30 September 2019 be noted.