Agenda item

The report of the Director – Finance and Corporate Services is attached.

The Service Manager - Finance presented the Capital and Investment Strategy Outturn which summarised the transactions undertaken during the 2021/22 financial year reporting against the Council’s Capital and Investment Strategy 2021/22-2025/26. The report also provided information on the Council’s commercial investment activity and summarises requirements of the new CIPFA Code.

The Service Manager - Finance referred to  the Prudential Indicators Summary which detailed the impact of capital expenditure activities during the year and highlighted the increase in the investments balance due to slippage in the Capital Programme due to re-profiling of expenditure on the Bingham Hub and  Crematorium and additional S106 deposits, adding that this had removed the need to externally borrow in 2021/22. The Group noted that this will be reported to Cabinet at its meeting in July.

The Service Manager - Finance highlighted the ratio of financing costs to the net revenue streams and reported that the actual costs are lower than originally estimated primarily as a result of income investments exceeding expectations and larger investment balances due to additional S106 monies and Community Infrastructure Levy (CIL).

In respect of interest rates the Service Manager – Finance advised the Group that the cash balances the Council are holding are unusually large, however, the council needs to ensure adequate liquidity for the revenue and capital activities , security for investments and to manage risks within all Treasury Management activities in line with the approved treasury strategy, therefore interest rates remain low in comparison to longer term investment options. Tables were provided in Appendix 1, detailing where the Council had placed investments and monthly returns on investments during 2021/22.

The Service Manager - Finance advised that overall, the council had successfully achieved it objectives of ensuring investments were held with relatively secure counterparties and ensuring there is sufficient liquidity to operate efficiently.

The Service Manager - Finance advised the Group that the updated Treasury Management Code requires local authorities to document a knowledge and skills schedule reflecting he need to ensure both officers and members dealing with treasury management are trained and kept up to date.

Members noted that that there would be more regular reporting of treasury management activities and were pleased to see that a more in-depth training for staff and members was to be implemented. Members requested that Treasury Training should be offered to all members, so they are able to substitute on Governance Scrutiny Group.

Members asked a specific question relating to inflation and whether the Council should be considering other sustainable solutions to encourage growth and not be reliant on monetary policy. The Director – Finance and Corporate Services advised the Group that monetary policy relies on investments primarily being secure followed by liquidity and then yield, adding that the Council is supporting economic growth by way of the Bingham Hub and crematorium developments. He also referred to the Freeport which is likely to dwarf anything that has been suggested, creating jobs, improved infrastructure and HS2 which in the long term should encourage further investment.

Members were encouraged by the Treasury Management reporting and noted that the Council was in a strong position financially. The chairman thanked the finance team.

It was RESOLVED that the Governance Scrutiny Group approves the 2021/22 outturn position.