Issue - meetings

Report of the Director – Finance and Corporate Services.

The Finance Business Partner presented the Capital and Investment activities of the Council for the period 1 April to 31 December 2023, which provided the Group with indicators that help ensure the Council’s capital and investment plans are affordable, prudent and sustainable and meet the requirements of the CIPFA Code of Practice.

The Group were advised the UK is facing a weakening economic outlook and an uncertain political climate due to the upcoming general election.

With regards to investment income, the Group noted interest receipts are slightly higher than anticipated, the Council achieved an average interest rate of 5.11%, compared to the average (SONIA) rate of 4.94%. The Finance Business Partner advised that to maintain and mitigate risk, the Council has continued to diversify its investment mix and continue to consider ‘green’ investments that are compliant with the Council’s strategy. The Council ensures investments are secure and that liquidity is achieved whilst proactively looking to maximise its rates of return. A full list of the Council’s investments was provided in Appendix A of the report.

The Group noted the borrowing and prudential indicators as part of the Council’s Capital and Investment Strategy and the credit balance shows that the Council has no need to borrow over the medium term.

With regards to commercial investments highlighted in Appendix D of the report, the Council must disclose its commercial income. The Council’s target is not to exceed 30% with the current actual income around 15%, leaving it less exposed to risks surrounding commercial property.

A specific question was asked in respect of balances in the call accounts and why were the interest rates on these investments lower. The Service Manager – Finance explained these were the Council’s everyday bank accounts where access to funds is needs to be immediate for the Council’s day to day transactions.

It was RESOLVED that the Governance Scrutiny Group notes the Capital and Investment Strategy update position as of 31 December 2023