Meeting documents

Report to be presented by Julie Edwards.

Julie Edwards attended to provide feedback on the report.

·         The report outlined Actions set for 2014/2015.

·         The average rate of return on investment was 0.88%, exceeding the weighted average London Interbank Bid (LIBID) for the year by 0.56%.

·         The total of these investments at any one time varied between £180m and £280m at interest rates between 0.44% and 1.55%.

·         The interest earned and credited to the Council’s revenue account was £2.19m.

·         Cash balances during the year were higher than expected and the CCLA property investment achieving higher than anticipated returns.

Member Questions/Comments

·         A Member queried the figure for 2014/2015 in regards to the Energy for Waste (EfW) technical adjustment.

·         Richard Ambrose advised that the Council was committed to making a payment to the EfW upon completion of the project in May 2016. In 2014/2015 we were required to account for the build work that had been completed to date. However, no payment would actually be made until the plant had been completed and had passed the operational tests (likely to be May 2016).

·         Richard Ambrose confirmed that this had been evident in the accounts since 2013/2014, with the amounts being proportional to the work undertaken. The total cost to the Council in May 2016 would be £180m.

Capital Financing Requirement

·         The Actual amount for 2014/15 is £319.334m, which was higher than the revised estimate for 2014/2015. This had resulted in a decrease in 2015/2016 from £328.189m to £325.887m.

Member Questions/Comments

·         A Member queried "as we are moving towards proactive financial management, have we learnt anything and do we liaise with other councils to share knowledge?"

·         Julie Edwards advised that a meeting was held twice a year with other councils to discuss treasury management issues. 

·         Richard Ambrose advised that the council had treasury management advisors who updated the team regularly. Some authorities took bigger risks and therefore made bigger returns on investments, but this was not recommended by the treasury management advisors. Due to the current financial climate, many of our investments are on a short term basis, this approach may be reviewed in a few years’ time.

·         Tim Butcher queried whether the Authorised Limit for External Debt figure of £400m (on page 76), reflected the figure that was brought to Full Council this time last year?

·         Richard Ambrose advised that the Authorised Limit was a requirement however the Operation Boundary Limit was a more realistic figure. The figures in this report reflect those that were brought to Full Council in February 2015.

·         The £100m difference in the two figures, relates to the EfW. In total the underlying need to borrow is £130m for this project. At present it was expected that we would borrow £30m externally and £100m internally. The Authorised Limit allows for flexibility, should we be required to borrow the full £130m.

·         The dramatic drop in the 2016/2017 figures related to the EfW technical adjustment and wouldl be flexible depending on the amount actually borrowed.

Recommendation

The Committee are asked to RECOMMEND to Council the treasury Management Annual Report and the actual Prudential Indicators for 2014/2015.

The Committee are asked to RECOMMEND to Council changes to the estimates of capital expenditure within Prudential Indicator 2.1 to £129.979m in 2015/2016, £53,053 in 2016/2017 and £30.100m in 2017/2018.

The Committee are asked to RECOMMEND to Council changes to the Capital Financing Requirement within Prudential Indicator 2.2 to £325.887 in 2015/2016, £317.505m in 2016/2017 and £307.013m in 2017/2018.

All Committee Members agreed to the recommendations.