Issue - meetings

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

Steve Kenyon, Deputy Director of Finance presented the Treasury Management Outturn Report (2021/22) and Quarter 1 Monitoring Report (2022/23)

The report summarised the treasury management activity over the 12 months of 2021/22 and the first three months of the current financial year. 2021/22 continued from the previous year, with observed high cash balances because of the Covid funds, but a low yield on the investments made.

The Council approached investment and prioritised the security of public money, then the liquidity of funds, with the ability to access the funds when required to support council services  and finally the interest generated. Interest was considered important on investments, but not at the expense of security or liquidity.

The council in 2021/22 continued to receive Covid funding, often at short notice and would be quickly distributed. There was little opportunity place the money  to secure interest on incoming funds.

The average daily balance was £9.3 million, down from the previous year’s figure of £13 million, however, more than expected due to the Covid funds.

Yield was 0.09% against the target of 0.1%.

The council was unable to lend money to other councils due to the reduction in demand and lack of need.

Cash return was £8800 in comparison to £13,000 the previous year.

The capital programme was £24 million, notable schemes included Alker Lane for £6 million, Whittle surgery £2 million, Tatton £9 million and Westway Sports Facilities for £1 million. The overall financing requirement of £14.7 million, the programme was funded from available resources and an additional loan of £10m was taken out towards the end of the year.

Interests rates increased during quarter 1 of the financial year, Link Asset Services forecast additional increases until December 2023, peaking at 2.753%.

The first three months of the year saw the average daily cash balance reduce to £9 million, but yield on investments increased to 0.58%, with a cash return of £13,700 which was greater than the whole of 2021/22.

No additional borrowing had taken place during the first three months of 2022/23.

The greatest impact of Brexit on treasury management activity was the uncertainty felt across Europe, nationally and locally. Trade agreements had eased some of the uncertainty. The economic impact was uncertain and difficult to assess due to parallel factors including global economic recovery following the pandemic and the war in Ukraine. 

It was confirmed that counterparty limits or prudential indicators had not been breached, last year or this year.

Resolved – that we noted the report.