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Issue - meetings
Treasury Management Mid-Year Report 2020-21
Meeting: 21/01/2021 - Audit Committee (Item 100)
100 Treasury Management Mid-Year Report 2020-21 PDF 435 KB
Minutes:
The Assistant Director, Financial Services and Revenues, presented a report to advise the Audit Committee of the Treasury Management activities and performance during the current year. It provides the opportunity to review the Treasury Management Strategy and make appropriate recommendations to Council to take account of any issues or concerns that have arisen since approving it in February 2020.
The Council operates a balanced budget, which broadly means cash raised during the year will meet its cash expenditure in combination with funding from reserves. Part of the treasury management operations ensure this cash flow is adequately planned, with surplus monies being invested in low risk counterparties, providing adequate liquidity initially before considering optimising investment return.
The second main function of the treasury management service is the funding of the Council’s capital plans. These capital plans provide a guide to the borrowing needs of the Council.
Covid-19 has highlighted the need to have proper and effective Treasury Management practices and policies in place. The Council has been able to sustain its services throughout this period, has not experienced undue difficulties in managing major cash flows, and retains sufficient reserves - given government assistance. The Treasury Management Strategy has proven successful at a time of most extreme challenge and therefore the recommendation is that there are no amendments to the existing year’s strategy.
In response to a question from the Chair the Assistant Director confirmed that the Council’s total debt is £65 million and the annual cost to service this debt is £3.5 million. Some of this amount goes to pay off the debt of annuity loans whilst some sits on balance sheet for future years. The Assistant Director reminded the committee that each capital investment is backed up by a business case. Capital projects also bring in revenue and off set other costs.
In response to a question regarding the £5.5 million loan to the Hastings Housing Company (HHC) the Assistant Director confirmed that the reason HHC is not currently actively purchasing property is because temporary accommodation is primarily being purchased and managed directly by the Council. The Housing Company has purchased properties equivalent to the £5.5 million and is receiving rent from these properties.
The Chair adjourned the meeting at 6.53pm and the meeting reconvened at 7pm.
RESOLVED (unanimously):
Audit Committee agree the Mid-Year report.
Reasons
The Code of Practice on Treasury Management requires, as a minimum, a mid-year review of the Treasury Management Strategy and performance. This is intended to highlight any areas of concern that have arisen since the original strategy was approved (February 2020). It is a requirement of the Code of Practice that the Mid-year review is considered by Cabinet, Audit Committee and full Council.
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