Report of the Executive Manager – Finance and Corporate Services

The Financial Services Manager provided a summary of the Council’s capital and investment activities for the period 1 April to 30 September 2020. The Financial Services Manager advised the Group that Covid-19 has caused huge economic decline in the UK and across the world. The Bank of England’s base is currently set at 0.1%. Economic growth fell by a record 20% in April 2020, the UK’s unemployment rate stood at 3.9% in the second quarter of 2020 and warnings from the Bank of England predict this could rise to 7.5% by the end of the year.

In respect of Investment Income and in order to maintain returns and mitigate risks, the Financial Services Manager advised that the Council has continued to diversify its investment mix, by placing deposits in short term liquid investments, for example; Money Market funds, Call Accounts, CCLA Property Fund, UK Local Authorities and other Diversified Funds. This was demonstrated in a table, which listed the Council’s investments as at 30 September 2020, totalling £40.173 million.

The Financial Service Manager continued, explaining that the Council is currently reviewing the Money Market Fund (MMF) with a view to maximising returns on the call accounts, and is proactively looking to maximise its rate of return. In addition, the Financial Services Manager informed the Group that the Council’s diversified funds that had fallen by £1.238m at 31 March 2020, had recovered by £500k by 30 September 2020 and reiterated that these investments are held long term and it is anticipated that these values will recover over time.

In respect of Capital Expenditure and in light of the impact of Covid-19 the programme was reviewed, and re-phasing of £18.465million has been requested together with the removal of £3.828million, the unallocated balance of Asset Investment Strategy provision, this will be referred to Council on 3 December 2020. These adjustments will give a revised Capital Programme of £16.078million for 2020/21, resulting in an estimated underspend of £1.556million.

The Executive Manager – Transformation advised the Group that the Council had identified specific sums for its Asset Investment Strategy within the Capital Programme. Of the £8.382million balance at the start of the year, £4.554m was committed to two acquisitions of Business Units at Unit 1 Edwalton Business Park completed on 9 July and Unit 3 Edwalton Business Park, completed on 13 October. Details of the investment appraisals were provided for the Group to consider. The Executive Manager – Finance and Corporate Services commented, this report demonstrated both good governance and transparency with regards to its commecial decision making.

Councillor Moore – Cabinet Portfolio Holder for Finance added that the new acquisitions were an excellent purchase in an established location within the Borough, indications support strong demand for offices in this locality.

The Executive Manager – Finance and Corporate Services and the Chair, Councillor Purdue-Horan reminded Councillors about the Treasury Management Taining Session on 9 December 2020.

It was RESOLVED that the Group notes the Capital and Investment Strategy update position at 30 September 2020.