Agenda item

That the Treasury Management activities for 2019/20 and the beginning of 2020/21 as set out in the body of the report be noted.

The Interim Service Lead, Finance introduced a report that detailed treasury activity in 2019/20 and the first half of 2020/21.  It was a requirement of the CIPFA Code and CLG Investment Guidance to report annually on treasury management activity.

The macro-economic context and outlook was summarised.  As at 31^st March 2020 the Council’s short term borrowing was £278m and long term borrowing was £351m.  Total borrowing was £630m of loans as part of the strategy for funding capital programmes.  Short term interest rates had remained much lower than long term rates and it had therefore been more cost effective to borrow short term to fund capital expenditure.  However, this position would not be sustainable in the medium term and the Council continued to review the options to minimise the cost of borrowing.

The borrowing had funded a range of important capital schemes across the town, including the hotels scheme on the Old Library Site that was nearing completion.  An update on the scheme was provided and it was noted that progress was ahead of schedule and recruitment was underway with a view to opening in January 2021.

Speaking under Rule 30, Councillor Strutton asked about use of the Public Works Loan Board (PWLB) and the projected impact of Covid-19 on investment returns from commercial assets given the financial difficulties reported for a small number of other councils.  The Director of Finance & Resources explained the position regarding the use of PWLB and commented that in recent times it had been possible to borrow more cost effectively from other sources.  The best options were constantly being reviewed following advice from the Council’s advisors, Arlingclose.  In relation to commercial investments, it was noted the hotels scheme was a long term investment and business plan was prudent and anticipated the hotels to build up to full occupancy by year 4, so the short term Covid-19 disruption was not expected to have a major impact.  An update was provided on some of the short term impacts on the strategic acquisitions programme and it was noted that the Council had a balanced portfolio to spread risks.

At the conclusion of the discussion the report was noted.

Resolved –  That the Treasury Management activities for 2019/20 and the beginning of 2020/21 as set out in the body of the report be noted.