23 Capital and Investment Strategy Update Q2 PDF 352 KB
Report of the Director - Finance and Corporate Services
Minutes:
The Finance Business Partner presented the Capital and Investment Strategy update 2024/2025 report which summarised the capital and investment of the Council for the period 1 April to 30 September 2024.
The Finance Business Partner highlighted some of the key headings from the update report, including in relation to:
· Economic forecast
· Investment Income
· Borrowing and Prudential Indicators
· Capital Expenditure and Financing
· Treasury Management and Prudential Indicators
· Risk Exposure Indicators
· Security and Liquidity
· Training and Development
The Finance Business Partner advised that interest rates were expected to stay higher, for longer, having a positive effect on returns in the medium term and that the UK economic outlook was generally positive. She said that pooled funds could be unpredictable with prices subject to fluctuations based on economic conditions, which could have a negative effect on the capital value. She said that the statutory override currently in place was due to end on 31 March 2025, so the Council would continue to monitor the situation and take advice from its Treasury Advisors.
Councillor Calvert referred to liquidity achieved and asked whether there was an acceptable level that the Council should aim for. The Director for Finance and Corporate Services said that it would be approximately £10m for a Council of this size.
Councillor Calvert asked about other adjustments and the Director for Finance and Corporate Services said that this information could be found in more detail in the Cabinet report and that it was for costs in addition to the budget.
Members of the Group asked about s106 monies and whether the Council used those for internal lending and how interest on them was calculated. The Director for Finance and Corporate Services said that the facility to utilise s106 monies was available but that the Council had not necessarily needed to use it, however, it made sense to use funds available to the Council rather than incur costs from external borrowing. He confirmed that the Council distinguished between the Council’s own funds and funds it was holding for s106.
The Finance Business Partner said that older s106 agreements would define the level of interest to be applied to the funds and for more recent s106 agreements the Council would apply an average of the interest rates available on the market. In relation to interest earned on funds, the Finance Business Partner said that that when reporting on interest, the Council did not include interest earned on s106 funds and that interest on s106 funds was calculated at the point that they were paid out.
Councillor Brich asked what was meant by medium term borrowing and the Finance Business Partner said that this covered five years.
It was RESOLVED that the Group reviewed and commented as necessary on the Capital and Investment Strategy update position as of 30 September 2024.