Issue - meetings

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

RESOLVED –

1.     That the 2019/2020 Treasury Management and Prudential Indicator position be noted; and

2.     That the increase in the forecast for investment and bank interest of £42,000, which increases the forecast budget from £687,000 to £729,000 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 updated Members on investments held by the Council and the interest received from those investments as required by the Treasury Management Policy and Strategy for the period 1 April to 31 December 2019.

Discussion and responses to Members questions included the following matters:

-       The projected interest from investments and bank interest for 2019/20 was now £729,000 which was an improvement to the budget of £42,000.  This was due in part to more funds being available for investment resulting from the rescheduling of the Capital Programme.  In addition, the interest from the Property Fund was higher than budgeted.

-       The initial £9m invested in the Property Fund was now worth £10.720m, a slight fall in value of about £156,000 since March 2019. It had however continued to do well in dividends, giving a net interest rate of 5.13%, which was slightly better than last year. 

-       As at the end of December 2019, £2m of the outstanding loan from the Public Works Loan Board (PWLB) remained.   A further £1m was repaid at the end of January 2020. 

RESOLVED –

1.    That the 2019/2020 Treasury Management and Prudential Indicator position be noted; and

2.    That the increase in the forecast for investment and bank interest of £42,000, which increases the forecast budget from £687,000 to £729,000 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 updated Members on investments held by the Council and the interest received from those investments as required by the Treasury Management Policy and Strategy for the period 1 April to 31 December 2019.

Discussion and responses to Members questions included the following matters:

-       The projected interest from investments and bank interest for 2019/20 was now £729,000 which was an improvement to the budget of £42,000. This was due in part to more funds being available for investment resulting from the rescheduling of the Capital Programme.  In addition, the interest from the Property Fund was higher than budgeted. 

-       The initial £9m invested in the Property Fund was now worth £10.72m.

-       As at the end of December 2019, £2m of the outstanding loan from the Public Works Loan Board (PWLB) remained.  A further £1m was repaid at the end of January 2020. By the end of the financial year £1m would remain, payment of which would be made in July 2020.

-       The Public Works Loan Board loan that was taken out was different from the numbers included in the Capital Management Report.  These figures were notional, the money had not been borrowed.  The only money that had actually been borrowed was that referred to in this report. Further clarification was requested which would be sent by email following the meeting. 

-       It was noted that the Council was currently sitting on a large amount of cash.  Approximately half of this was the Council’s own reserves.  A large amount was sitting in the S106 monies. As previously mentioned, as at the end of December 2019 there was £2m owing to the PWLB.  In addition, some was cash flow from money received for Business Rates and Council Tax. 

-       At the beginning of the year, the Council agreed a precept payment schedule which was then paid to Kent CC, Fire Authority and the Police. 

-       There was a separate Collection Fund where cash could be invested and interest made.  Surpluses in this Fund could take up to 18 months to be reallocated which resulted in fluctuations in the amount of cash the Council had available. 

-       Allocation of S106 money was completely dependent on the agreement made.  The agreement would specify what the money could be spent on.  Other agreements might also specify where the money could be spent.

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