Agenda item

The purpose of this report is to provide Members with information on the proposed Treasury Management Strategy Statement, Minimum Revenue Provision (MRP) Policy Statement and Annual Investment Strategy for 2024/25.

Members considered the Treasury Management Strategy Statement, Minimum Revenue Provision Policy Statement and Annual Investment Strategy 2024/25 presented by Mark Saunders, Chief Accountant.

Members asked questions, made comments and received responses as follows:

·         Councillor Booth referred to borrowing money in the future, which is likely to be through Public Works Loan Board (PWLB) and asked if it is correct that the Council is looking to make any borrowing after September when rates are expected to decrease? Mark Saunders confirmed that it would be around this time but it depends upon the timing of a variety of items, with the capital programme cash flow tending to be towards the second half of the year by the time the schemes get up and running and similarly with the normal cash flow it tends to be higher in the first half of the year than it does in the second half.

·         Councillor Booth asked if the PWLB’s rate is about 5%? Mark Saunders confirmed that it is just over 5%, with a discount for being a local authority. Councillor Booth continued that it was just after the budget in 2022 when all the rates increased and the effects are still being felt now. Mark Saunders agreed, the property funds invested in March 2022 was in good timing as within the next 6 months things went completely haywire in terms of interest rates and the impact on some of the property type funds, with the Council still suffering the consequences of this but they are long-term investments so it is hoped that this situation will be rectified. Peter Catchpole added that the Council will always look at a range of options when borrowing money and have used internal borrowing as much as it can but equally it might not be the PWLB because although all the local authorities plead poverty there is still a lot of cash in the system and it might be that the Council does short-term borrowing from another local authority as that might be more beneficial. He stated that the Treasury Management Strategy looks at options every day and the Council has professional advisors and no action is taken without taking advice and looking at lots of different options, with PWLB historically being good but they did hike their rates as a reaction to a lot of the commercial borrowing that local authorities were undertaking. Peter Catchpole made the point that this Council is always very careful and would look at the circumstances at the time when looking to borrow.

·         Councillor Christy referred to the external interest payments revised estimates and asked if this was as the result of interest changes? Mark Saunders responded that it would be a combination of the fact that the Council will be taking more borrowing next year and £618k is the amount that is on the Council’s current borrowing and does depend upon the extent of the borrowing that is required.

·         Councillor Christy referred to Section 5 on the Capital Programme and asked what sort of assumptions are being used on things like capital grants and Section 106 and other contributions which seem to be decreasing quite significantly as well as the forecast capital expenditure. Mark Saunders responded that the capital grants for this year and next year are grants which the Council knows it is likely to receive as they part of the funding arrangements for particular capital projects and also incorporate the £1,194k, which is essentially to do with disabled facilities grants that the Council receive funding from the Government and this figure will not be known until these years which is just taken forward into the future and if more or less is received the programme is scaled accordingly. He added that the Section 106 is based upon what the Council has received to date, with £1 million of the £1,025k being in relation to affordable housing which is being used to part fund the local authority housing fund but going forward that is using some of the money the Council has got set aside for recreation grounds and playground equipment received from developers.

Members endorsed the strategies to be included in the final budget report for 2024/25.

(Councillor Booth declared in the interests of transparency as there was an investment with Yorkshire Building Society that he did work for this building society five years ago)