Decision details

TREASURY MANAGEMENT SIX MONTH UPDATE

Decision Maker: Corporate Audit Committee

Decision status: Approved

Is Key decision?: No

Is subject to call in?: No

Decisions:

The Interim Director – Finance presented the report.

 

The average rate of return on investments for 2018/19 was detailed in Appendix 3.

 

The Council’s Capital Financing Requirement at 31st March 2018 was £247.1m with a projected total of £434m by the end of 2018/19 based on the capital programme approved at February 2018 Council. Cash balances are being used to finance capital spending in preference to borrowing. This makes sense while interest rates on cash on deposit are so low. Appendix 6 shows that there was a favourable variance in relation to capital financing April-September.

 

In response to questions from Members the Interim Director – Finance stated:

 

·  The Central Library refurbishment was still in the capital programme, though the project was on hold and was being reviewed.

 

·  The cost of repaying or rescheduling loans whose interest rates had reverted to the variable rate of 4.5% was currently greater than the cost of continuing with them.

 

·  The period up to Brexit and beyond could well be turbulent. The Council will monitor developments and changes in interest rates with advice from Arlingclose and seek to diversify its borrowing and to borrow at the lowest rates available.

 

A Member noted that the Bank of England’s response to the result of the European Referendum had been to reduce base rates; he suggested that this might happen after Brexit and might provide the Council with an opportunity to reschedule its loans at a low cost The Interim Director – Finance assured the Member that the Finance team were monitoring developments closely. The aim was always to borrow at the most advantageous rate possible.

 

RESOLVED to note:

 

1.  the Treasury Management Report to 30th September 2018, prepared in accordance with the CIPFA Treasury Code of Practice;

 

2.  the Treasury Management Indicators to 30th September 2018.

Publication date: 08/01/2019

Date of decision: 04/12/2018

Decided at meeting: 04/12/2018 - Corporate Audit Committee

Accompanying Documents: