Agenda item

Report of the Director – Finance and Corporate Services

The Finance Business Partner presented the Capital and Investment Strategy Outturn 2024/25 which summarises the transactions undertaken during the year against the Council’s Capital and Investment Strategy 2024/25.

The Group were guided through the key prudential and treasury indicators detailing the impact of capital expenditure activities during the year.

The Finance Business Partner explained the Council’s overall borrowing need for Capital expenditure, the Capital Financing Requirement (CFR), which represents the net capital expenditure in 2024/25 and prior years that has not yet been paid for by revenue or other resources. The Council’s CFR for 2024/25 remains positive and no internal borrowing was needed in 2024/25 giving a closing balance of £9.989m.

The Finance Business Partner referred to Table 4, Ratio of Financing Costs to Net Revenue Stream and Table 5, Net Income to Net Revenue Stream and explained that due to higher income from investments throughout the year remaining above expectations, higher cash balances can be seen.

The Group were asked to note the treasury position at 31 March 2025 at table 8 in the report, which detailed a snapshot of the financial institutions that the Council had investments with at the end of 2024/25. Whilst the Council continues to ensure investments are secure, it proactively looks to maximise its rate of return and the overall rate of return for the year was 4.69% compared to the budgeted rate of 4.50%. As well as the elevated interest rates, additional S106 monies and underspends on the capital programme resulted in an increase in the amounts available to invest resulting in a net return on investments of £2,168,600 against a budget of £1,043,200.

It was noted that the Council continues to pursue Environmental Social and Governance (ESG) investments where these satisfy the principles of security and liquidity.

With regard to the Asset Investment Strategy the Finance Business Partner referred to table 13 Commercial investment income and costs and advised the Group that the Council’s investments have been in industrial units and in offices and these have been very successful and whilst property income is important for the Council’s budget, there is not an over emphasis upon property income.

Members of the Group commented on the recommendation to increase the counterparty limit for banks from £3m to £5m and whether this was in relation to Barclays and asked if officers were satisfied that other assets were not at risk or could funds be moved to a more secure investment. The Head of Finance explained that the Council takes advice from its treasury advisors and looks to spread any investment risk across a wide range of investments and the £5m limit is in line with recommendations.

Councillor Gaunt asked a specific question relating to S106 funding being held by Rushcliffe for Nottinghamshire County Council and who receives the interest on the funds when drawn down. The Head of Finance explained that any interest accumulated would be calculated along with the original S106 funding and released to the recipient. This was confirmed by the Chair in respect of a development in Newton Parish Council.

It was RESOLVED that the Governance Scrutiny Group:

a)    Considered and scrutinised the Capital and Investment Strategy 2024/25 outturn position

b)    Agreed the change to the counterparty limit for banks (unsecured investments) from £3m to £5m.