Agenda item

Treasury Management Annual Report for the Financial Year 2021-22

This report provides details of performance against the Treasury Management Strategy Statement (TMSS) 2021-22, approved by the County Council on 24 February 2021. The report provides a review of borrowing and investment performance for 2021-22, set in the context of the general economic conditions prevailing during the year. It also reviews specific Treasury Management prudential indicators defined by the (CIPFA) Treasury Management Code of Practice and CIPFA Prudential Code for Capital Finance in Local Authorities, (the Prudential Code), and approved by the Authority in the TMSS.

Treasury Management Annual Report for the Financial Year 2021-22

The report provided details of performance against the Treasury Management Strategy Statement (TMSS) 2021-22, approved by the County Council on 24 February 2021. The report provided a review of borrowing and investment performance for 2021-22, set in the context of the general economic conditions prevailing during the year. It also reviewed specific Treasury Management prudential indicators defined by the (CIPFA) Treasury Management Code of Practice and CIPFA Prudential Code for Capital Finance in Local Authorities, (the Prudential Code), and approved by the Authority in the TMSS.

The report was presented by the S151 Officer. She reported that PWLB rates were now at 4.69% which was significantly higher than six months ago. It was not clear which way interest rates would continue and this was why the Autumn Statement from the Chancellor was very important. Regarding current borrowing, the weighted average rate would increase significantly as the Authority continued to borrow externally, instead of using internal borrowing. This would probably happen sooner than expected because of interest rates rising. Given the size of the capital programme, even a modest increase in the cost of borrowing had a significant impact on the revenue budget and she advised members that consideration would need to be given to the size of the capital programme going forward. She felt there would be an impact both on the current capital programme and sustaining the levels of investment in future years.

The report was proposed by Councillor Wearmouth and seconded by Councillor Sanderson.

A number of member comments were made:-

•         Councillor Dickinson hoped for some stability within the Government so the Authority could work with them in confidence. He felt it was important to nail down the capital programme to a level which was affordable because of the impact on the revenue budget. He asked the S151 Officer if she could provide a figure for the covid grants which were fraudulently claimed, how much was recovered and how this would be reported back.  The S151 Officer replied that a report had been made to Scrutiny on the outcome of the business grants which reported that a very low level of fraud had been detected and reported through the normal channels. A much wider national exercise was ongoing – the post payment assurance process – and she had just signed off the returns on the various grant schemes. It was expected that results would be published by the Government across the whole programme and they would feedback to the Authority if they detected anything suspicious.

•         Councillor Reid thanked officers for their work on this very important report and asked if a simple member briefing could be delivered on it. Councillor Wearmouth agreed this could be arranged. The Leader suggested that training opportunities with neighbouring authorities should be investigated, or possibly a policy conference in January which would allow people to have a dialogue.

RESOLVED that the report be received and the performance of the Treasury Management function for 2021-22 be noted.