Issue - meetings

To receive and consider the report of the Director of Finance.

Jean Waddington, Principal Financial Accountant presented the report of the Director of Finance which outlined Treasury Management performance and compliance with Prudential Indicators for the financial year ended 31 March 2023.

The Treasury Strategy for 2022/23 to 2024/25 was approved by Council on 22 February 2022. A mid-year review of Treasury Management activity was presented to the Governance Committee on 23 November 2022

It was reported that capital expenditure in 2022/23 was at £13.4 million. The progression of the 2022/23 programme, which included the Strawberry Meadows and Tatton Gardens developments, was affected by rising construction costs, rising interest rates and global supply chain issues. External finance of £4.6 million was required to fund the 2022/23 capital programme spend.

The Committee noted that the average daily investment was at £6.1 million in 2022/23, which was down from £9.3 million in 2021/22 due to the reduction in Covid Grants. From historically low levels of interest rates in 2020/21 and 2021/22, following a number of increases the average yield for 2022/23 was significantly higher than previous years at 1.72%, above the benchmark of 1.22%.

The Council continued to achieve budget savings by maintaining a position of under borrowing, which means that it has used its own cash balances to finance capital expenditure rather than taking additional external loans.

The Committee Members discussed how to get the best return on investments and were advised that the council the best return, or saving, was in using cash balances instead of borrowing; Members were advised that the council would only borrow externally if cash balances required this as it was cheaper to use internal resources. If investing, the council would consider where money is placed and in what form. If the council could get a better interest rate by placing money for longer, this would be considered but only if it was certain that there would be readily available cash flow over the course of the investment period.

Resolved – That the report be noted.