Issue - meetings

To consider and decide on the recommendations as set out in the attached report.

RESOLVED –

1.     That the Treasury Management and Prudential Indicator position be noted.

2.     That the forecast for investment and bank interest is £586,000, a decrease of £47,000 from the approved budget of £633,000, but an improvement of £140,000 from the Quarter 2 projection be noted.

REASON FOR DECISION:

Ensuring effective cash flow management was vital in order to support all the services provided by the Council. The interest received from investments was an important source of income in helping to set a balanced budget.

Jane Fineman, Head of Finance, Procurement and Parking introduced the report that monitored compliance with the Treasury Management Policy and Strategy 2020/21 for the period 1 April to 31 December 2020.

Discussion and responses to Members questions included the following:

-       The projected interest from investments and bank interest for 2021 was £586k, a reduction on the budget of £47k.

-       This was a significant improvement of £140k on the quarter 2 forecast.

-       Overall, the expected interest rate was 1.22%, compared to the budget of 1.81%.

-       The increase was mainly due to the investment with the Local Authorities Property Fund.  It had been projected that the average interest rate achieved during 2021 would be lower due to the pandemic.  However, the actual dividends to the end of December 2020 was 5.04%, very similar to previous years.

-       The Councill had also negotiated improved interest rates for its current bank account and its 95 day notice account and was therefore achieving a better than expected rate on its short-term cash.

-       The Council’s £9m investment with the Property Fund was valued at £10.2m as at 31 December 2020.  This was an improvement from quarter 2 of £145k.

-       The Bank of England interest rate was 0.1% and another rise was not expected in the next 3 years.

RESOLVED –

1.    That the Treasury Management and Prudential Indicator position be noted.

2.    That the forecast for investment and bank interest is £586,000, a decrease of £47,000 from the approved budget of £633,000, but an improvement of £140,000 from the Quarter 2 projection be noted.

REASON FOR DECISION:

Ensuring effective cash flow management was vital in order to support all the services provided by the Council. The interest received from investments was an important source of income in helping to set a balanced budget.

To consider and provide a recommendation to Cabinet on the proposals set out in the attached report.

Jane Fineman, Head of Finance, Procurement and Parking introduced the report that monitored compliance with the Treasury Management Policy and Strategy 2020/21 for the period 1 April to 31 December 2020.

Discussion and questions from Members included the following:

-       The projected interest from investments and bank interest for 2021 was £586k, a reduction on the budget of £47k.

-       This was a significant improvement of £140k on the quarter 2 forecast. 

-       Overall, the expected interest rate was 1.22%, compared to the budget of 1.81%.

-       The increase was mainly due to the investment with the Local Authorities Property Fund. It had been projected that the average interest rate achieved during 2021 would be lower due to the pandemic.  However, the actual dividends to the end of December 2020 was 5.04%. 

-       The Council had also negotiated improved interest rates for its current bank account and its 95 day notice account and was therefore achieving a better than expected rate on its short-term cash.

-       The Council’s £9m investment with the Property Fund was valued at £10.2m as at 31 December 2020.  This was an improvement from quarter 2 of £145k.

-       The Bank of England interest rate was 0.1% and another rise was not expected in the next 3 years.

-       The Council’s current contract for its current account did not permit negative interest so it wasn’t an issue for the remainder of the current term. 

RESOLVED – That the recommendations to Cabinet as set out in the report be supported.