Issue - meetings

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

Tony Furber (Principal Financial Accountant) explained that the 2020/21 was a year unlike any other. The base interest rate was 0.1%. Cash flow patterns were unusual due to the inflow and outgoings of millions for Business Support Grants.

Due to the unusual cash flow and low interest, the Council possessed more money than usual as there were fewer opportunities to use it with more competition. The situation is common for nearly all Councils.

Chorley Council typically keep money for a short amount of time which increased difficulty to meet earnings target. In 2019/20, the target was 0.75% with an actual result of 0.63%. The target for 2020/21 was 0.1% and the Council came close at 0.09%. The average daily balance was £30.8m with a total of £12740 interest earned. Base interest rates were unlikely to be changed for the foreseeable future.

The pandemic impacted other areas covered in the report. The Capital Programme was significantly impacted with a total of £9m for the year and did not reach levels expected. Of the £9m, £7m directly financed from capital receipts, grants, and revenue contributions leaving £2m for underlying borrowing requirement. Due to this, the Council did not enter into any further external long-term borrowing.

Upon question from Members, Tony confirmed that there was not a method of refinancing existing borrowing without paying a premium.

Decision: The report was noted.