Agenda item

Agreed to recommend to Council the following:

a.  Approval of the Treasury Management Strategy (TMS) for 2023/24 to 2027/28 including:

i.  Minimum Revenue Provision Policy Statement for 2023/24 (Appendix 1)

ii.  Annual Investment Strategy for 2023/24 (Appendix 2)

iii.  Approved Counterparty List (Appendix 3)

iv.  Approved Countries for Investments (Appendix 4)

v.  the Prudential Indicators for the period 2023/24 to 2025/26 (Section 4 of the TMS)

The Lead Member for Financial Oversight & Council Assets introduced a report that set out the Council’s treasury management strategy for 2023/24 to 2027/28 which covered the borrowing and debt reduction strategy, prudential indicators, Minimum Revenue Provision (MRP) policy and investment strategy, including loans to third parties.

The proposed strategies for MRP, annual investment strategy and approved counterparty list for investments were unchanged from 2022/23.  A much improved overall position was reported with borrowing being repaid ahead of schedule and the Capitalisation Direction fully financed three years ahead of schedule.  The Council was on track to repay the remaining £133m of temporary borrowing by September 2023, subject to the continued successful delivery of the asset disposal programme.  The asset disposal programme had a target of sales for £50m in 2022/23 but was forecast to achieve £210m.  The target for 2023/24 was £75m and the current forecast was £410m.  The Council may be able to bring overall borrowing back down to a sustainable level by March 2025.  The Lead Member highlighted the potential opportunity to pay off the pension fund deficit in 2023/24 which could yield a £5m annual revenue budget saving.

Lead Members welcomed the good progress that had been made over the past year and agreed the strategy should be recommended to Council.

Councillor Smith addressed the Cabinet and commented the relatively poor rates of return on investments under the strategic acquisitions programme and sought assurance a minimum rate of return of 5% per annum would be achieved in future.  In response, it was commented that the main problem with the assets purchased in the past was that the cost of MRP had not been properly considered.  The Council had no plans acquire new assets for investment purposes.

Recommended –

(a)  That the Treasury Management Strategy (TMS) for 2023/24 to 2027/28 be approved including:

i.  Minimum Revenue Provision Policy Statement for 2023/24 (Appendix 1)

ii.  Annual Investment Strategy for 2023/24 (Appendix 2)

iii.  Approved Counterparty List (Appendix 3)

iv.  Approved Countries for Investments (Appendix 4)

v.  the Prudential Indicators for the period 2023/24 to 2025/26 (Section 4 of the TMS)