Agenda item

The Director of Resources presented a report which provided an update on the Council’s investment and borrowing position at 30 September 2024 and the performance against the Council’s approved Prudential Indicators for 2024/25. The indicators showed full compliance as at 30 September 2024

The investment analysis, at appendices A and B, confirmed that, at 30 September 2024:

(i)          total long investments (over 12 months) amounted to £8.7 million. This reflected the closure of the UBS Multi-Asset Fund on 16 September 2024.

(ii)        short term investments (less than 12 months) amounted to £10.0 million, including £2.3 million returned when the UBS Multi-Asset Fund closed.

(iii)        the Council held £20.6 million in non-treasury investments, comprising capital loans to specific service providers and limited companies.

(iv)        the total amount of Public Works Loan Board (PWLB) loans was £96.3 million, comprising £43.4 million General Fund loans and £52.8 million Housing Revenue Account loans.

Investment income for 2024/25 (treasury and non-treasury) was forecast at £1,951,262 which was £455,562 better than budget.

The report confirmed that funds returned as a result of the closure of the UBS Multi-Asset Fund had been split and invested in two AAA rated bonds with yields of 4.76% and 4.57%. This was higher than had been anticipated when the Sub Committee agreed to the investment of these funds in one-year bonds at the meeting of the Sub Committee on 17 September 2024.

Arising from the debate at the meeting of 14 June 2024, Officers had considered the timetable of future meetings of the Sub Committee. It was acknowledged that the time gap between quarter end and Sub Committee meeting dates was not ideal. However, due to other reporting that the Sub Committee received at quarter end and year end, including the prudential indicators which relied upon metrics that could not be moved forward, the timetable of meetings would not be amended. Officers had proposed that an informal update would be sent to Sub Committee Members in April with the investment outturn. These figures would formally be reported at the June meeting.

Arising from the debate, Officers confirmed:

·         relevant Treasury Management information should be circulated to the Sub Committee informally as soon as it becomes available. Sub Committee training would be taking place in the next few months, and this would cover the prudential indicators.

·         as a result of the recent UK budget, it was expected cuts in interest rates would be fewer, resulting in long term interest rates remaining higher than previously anticipated. The Government had maintained the preferential borrowing rate for the Housing Revenue Account.

·         investments in Funding Circle were winding down, and Funding Circle was not accepting new investors.

R E S O L V E D – that:

A)   The Council’s Investment and Borrowing position at 30th September 2024 as set out in Appendix A & B be noted.

B)   The Council’s actual performance against the Indicators set within the Treasury Management Strategy for 2024/25 in Appendix C be noted.

C)   The commentary from Arlingclose on the external context for treasury management be noted.

D)   The rationale for the future meeting dates and the proposed mitigation for the timeliness of investment performance information be noted.