Agenda item

In line with the agreed Treasury Management Strategy, the Council continued to be both a short-term investor of cash and borrower to manage day-to-day cash flows. Current forecasts indicated that, in the future, temporary borrowing may be required to fund normal day-to-day cash flow activities and longer-term borrowing would increase to fund commitments in the current capital programme, as well as the impact of reduced capacity for ‘internal borrowing’.

The Authority also invested in three covered bonds within 2022-23, totalling £10m, in line with the Council’s Treasury Management Strategy, which stated that the Council would consider long term investments of up to £10m.

During the year, the Council’s total borrowing had reduced from £142.1m to £138.6m and total investments reduced from £58.3m to £47.2m, meaning overall the Council net borrowing increased by £7.6m to £91.4m as at 31 March 2023.

The report confirmed that all prudential indicators were complied with during 2022/23. 

Committee Member Comments:

§  Councillor Cocks asked how slippage was being managed in relation to Capital Schools Programme, as this had been delayed due to Covid.  The Assistant Head of Finance mentioned that the Capital Programme overall was set and agreed by Cabinet and was profiled as realistically as it could be.  The Finance team were looking at the governance arrangements to manage the risk of slippage in a better way. Covid was a factor as well as inflation but there was a balancing act however it was being managed and it was hoped that there would not be as many reporting of slippages in the future.

Councillor Cocks went on to ask if the Welsh Government would provide funding to help the Council.  The Assistant Head of Finance advised that Welsh Government was always open to discussions and opportunities to provide more funding. 

§  The Chair reminded Councillor Cocks that the Governance and Audit Committee’s role was to ensure that staff had treasury management and prudential indicators under control. As a committee needed to be assured that the programme was fundable to meet the respective commitments and any changes were monitored by officers.

§  Dr Barry commented that it was an excellent paper and it gave assurance to the Committee Members and thanked the Assistant Head of Finance. Dr Barry referred to the £10.6M of Council owned property and asked was capacity being reviewed going forward and was there any opportunity to generate revenue.  The Strategic Director for Transformation and Corporate advised that the assets across Newport were operational nature and that the vast majority of assets were schools, commercial industrial and land.  There was a project in place to develop a new asset strategy and maximising the income associated with the assets, by way of repurposing, disposal and asset transfer.  The Assistant Head of Finance also added that the £10.6M was mainly investment property, which would generate a return.

§  D Reed referred to page 50, point 13 and asked if there was an error in in the Investment and Accrued Interest figures.  The Assistant Head of Finance would check the figures for accuracy and amend accordingly before it was reported back to Cabinet in June.

§  The Chair echoed Dr Barry’s comments that this was an excellent report with a good training session prior to committee and thanked everyone that contributed to the report.

Resolved:

The Governance and Audit Committee noted the report on treasury management activities for the period 2022-23 and provided comments to Cabinet/Council. 

It was also recommended by the Governance and Audit Committee that this be kept under regular review.