25 MC/21/10 ANNUAL TREASURY MANAGEMENT REPORT – 2020/21 PDF 945 KB
Chair of Joint Audit and Standards Committee
At its meeting on 26 July 2021, Joint Audit and Standards Committee considered Paper JAC/21/2, the Annual Treasury Management Report 2020/21. Paper MC/21/10 now includes all the relevant updated information following consideration by the Joint Audit and Standards Committee, together with the necessary recommendations.
Minutes:
Councillor Muller introduced the report and informed Councillors that the Treasury Management 2020/21 outturn report was discussed at Joint Audit and Standards Committee on 26 July 2021.
The report provided details of investment performance, effects of decisions taken during the period and confirmed compliance with the Council’s Treasury Management Policy.
The Bank of England held the Bank Rate at 0.1% throughout the year but extended its Quantitative Easing programme by £150 billion to £895 billion in November 2020.
The UK unemployment rate was 5.0% in the three months to January 2021. Unemployment is expected to increase as the various Government job support schemes come to an end.
Inflation has remained low over the 12-month period. Latest figures showed the annual headline rate of UK Consumer Price Inflation (CPI) fell to 0.4% year on year in February, below expectations (0.8%) and still well below the Bank of England’s 2% target.
Councillor Muller then informed Council that specifically for Mid Suffolk, the Council was able to take advantage of holding additional cash from government grants received relating to Covid 19 until they were paid out to support local businesses. This has increased treasury management investment activity during the year.
The Council operated within the daily bank account limits.
Mid Suffolk’s short- term debt increased by £19.6m, offset by the repayment of £12.4m medium/long term borrowing to take advantage of lower rates after the PWLB rates were increased. The increase in debt was mainly due to the £19.3m of approved investments in the non-treasury investments of CIFCO Ltd and £600k to the Gateway 14 Ltd.
All investment activities undertaken were in accordance with the approved Counter Party list.
Investment in funding circle has reduced by 53k as unallocated funds had been reclaimed and existing loans repaid leaving the balance as at 31st March 2021 as £162K.
The Council was compliant with the upper limits for interest rate exposure. The investment activity undertaken throughout the year was done so in priority order of security and liquidity over yield as prescribed in the Treasury Management Strategy.
Finally, Councillor Muller drew attention to two figures in Appendix C paragraph 1.14 Table 24 in the Mid Suffolk table and informed Council that the figures should read CCL £5m and Investec £2m he confirmed that no change had been made to the investment in these funds.
Councillor Muller then MOVED the recommendations in the report which Councillor Caston SECONDED.
Councillor Matthissen drew Council’s attention to the risk table ... view the full minutes text for item 25
40 BC/21/14 ANNUAL TREASURY MANAGEMENT REPORT – 2020/21 PDF 945 KB
Chair of Joint Audit and Standards Committee
At its meeting on 26 July 2021, Joint Audit and Standards Committee considered Paper JAC/21/2, the Annual Treasury Management Report 2020/21. Paper BC/21/14 now includes all the relevant updated information following consideration by the Joint Audit and Standards Committee, together with the necessary recommendations.
Minutes:
Councillor Hurren introduced the report and informed Councillors that the Treasury Management 2020/21 outturn report was discussed at Joint Audit and Standards Committee on 26th July 2021.
The report provided details of investment performance, effects of decisions taken during the period and confirmed compliance with the Council’s Treasury Management Policy.
The Bank of England held the Bank Rate at 0.1% throughout the year but extended its Quantitative Easing programme by £150 billion to £895 billion in November 2020.
The UK unemployment rate was 5.0% in the three months to January 2021. Unemployment is expected to increase as the various Government job support schemes come to an end.
Inflation has remained low over the 12-month period. Latest figures showed the annual headline rate of UK Consumer Price Inflation (CPI) fell to 0.4% year on year in February, below expectations (0.8%) and still well below the Bank of England’s 2% target.
Councillor Hurren then informed Council that specifically for Babergh
2. The Council operated within the daily bank account limits.
3. Short-term debt has increased by £15.5m.
4. The Council lent a further £19.3m to CIFCO Ltd.
5. All investment activities undertaken were in accordance with the
approved counterparty list.
6. The Councils’ investment activities including average returns can be found in Appendix C of the report.
7. The investment in Funding Circle has reduced by £48k as unallocated funds have been reclaimed and existing loans repaid, leaving the balance on 31st March as £166k.
Councillor Hurren then MOVED the recommendations in the report which Councillor Plumb SECONDED.
Councillor Busby queried why the General Fund borrowing had increased from £50.7m to £71.3m in the previous year?
In response, the Section 151 Officer confirmed that this was due to the finalisation of the CIFCO purchases in that year.
Councillor Ward asked if the net borrowing and total borrowing figures could be separated into the General Fund and the HRA fund and reflected in the report in the same way as the capital financing requirements was.