Agenda item

The Sub-Committee was presented with a summary of the Council’s investment and borrowing position as per Appendix A. The report set out the final position for financial year 2021/22, together with an update and accompanying scenario planning on the future of the Council’s long-term investments. This reflected the recommendation from the previous meeting to retain investments in the following four funds until the Government decides whether to extend the current ‘statutory override’ (of usual accounting practice) which prevents gains and losses in capital values from impacting on the revenue budget:

(i)      CCLA (diversification fund)

(ii)     CCLA (property fund)

(iii)   Schroders bond fund

(iv)   UBS multi-asset fund

The accompanying report advised that the Council’s contract for expert Treasury Management advice with Link Group had terminated on 30^th April 2022 and a new contract had been entered into with Arlingclose.

In response to Members’ questions, it was confirmed that:

·                  the rate of interest charged on loans from the Public Works Loan Board was fixed until maturity

·                  a debt profile of the various loans taken out by the Council, together with associated maturity dates, could be provided

·                  the swings in the value of short term investments held in money market funds over the course of the year, and since the last report, reflected a fluctuating cash position, e.g. due to Government funded grant schemes which the Council was required to administer

·                  quoted yield rates are based on current asset values, a presentation that should be reviewed.

The report also confirmed that the current statutory override would remain until 31^st March 2023 and that the Government is expected to consult shortly before deciding whether to renew it. It was hoped that a decision would be made in time to inform the 2023/24 budget setting process. In the meantime, the Council’s investment options, according to whether the override would continue, had been scoped in accordance with Appendix C. 

In the event of the override being removed, Arlingclose had advised that disinvesting from funds (i), (iii) and (iv) should not present difficulties. While this was not necessarily the case for the CCLA property fund, there did not appear to be any appetite among other authorities to withdraw and the Council was advised to maintain its investment.

A discussion took place regarding the redemption proceeds from Funding Circle loans. This related to the meeting on 24^th January 2020 when the Sub-Committee agreed to disinvest from Funding Circle, with the redemption proceeds being invested elsewhere within the Council’s treasury portfolio, namely 25% to each of the funds at (i) to (iv) above. However, in light of the challenges imposed by the pandemic, redeemed Funding Circle proceeds had, instead, been used ever since to support the Council’s cashflow. Following a suggestion from Councillor Jones, it was agreed that this matter be reviewed at the Sub-Committee’s next meeting.

            R E S O L V E D – that:

A.    the Council’s investment and borrowing position at 31^st March 2022, as set out in Appendices A and B, be noted;

B.    the scenario planning work underway to prepare for decisions expected from Government on the future of the statutory override be noted; and  

C.   the use of the redeemed proceeds from Funding Circle be reviewed at the Sub-Committee’s next scheduled meeting on 4^th November 2022, including an analysis of the potential sum available in light of the Council’s cash flow requirements and debt profiles.