Agenda item

The Presiding Member invited the Leader to present the first report, which outlined the Council’s treasury management activity for 2023/24 and confirmed that treasury activities during the year complied with the Treasury Strategy previously considered and set by Members.

The purpose of the report was to inform Council of treasury activities undertaken within the financial year 2023/24.

The report outlined borrowing and investment activities during the year, including compliance against the agreed prudential indicators. The report also provided an outlook for the forthcoming year and over the medium term.

The report was already considered by Governance and Audit Committee and Cabinet who provided no further comments for Council’s consideration.

During the year, total borrowing reduced from £138.6m to £137.1m.

·        This movement included repayment of Lender Option Borrower Option (LOBO) loans totalling £15m, which were replaced with £15m of PWLB borrowing.

·        The LOBOs were redeemed because the lender exercised their option to increase the interest rates and the Council took the opportunity to exit the arrangement at that point.

·        The new Public Works Loan Board (PWLB) loans were the first new long-term loans for the Council in a number of years, although they were only taken out to replace existing long-term loans.

·        There was an increase in interest-free Salix loans which were used for energy efficiency projects.

·        Two small PWLB loans were redeemed and a number of EIP (Equal Instalment of Principal) loans were repaid in instalments over the course of the year.

Investments reduced from £47.2m to £13.9m

·        This was expected to happen, as reserves were being used as planned and the progress of the capital programme reduced internal borrowing capacity.

·        Of the year-end balance, £10m continued to be held in long-term covered bonds, to ensure the Council retained its professional client status, meaning it could access better borrowing rates.

The report noted that all of the prudential indicators were complied with.

The outlook for next few years showed that:

·        There was an underlying need to borrow coming to the fore, as the capital programme was delivered, and reserves were used.

·        This would most likely result in new external borrowing.

·        This was expected and the capital financing budget allowed for that. 

·        There was also a need to refinance some large loans (circa £20m) towards the end of the year which was also planned for.

·        There was a risk that the remaining LOBOs could need redeeming, but the hope was that equivalent, if not better, interest rates could be accessed for any replacement loans required.

·        Officers would monitor interest rates closely, to ensure the best rates were accessed for any new borrowing, in liaison with external treasury advisers.

Councillor Drewett seconded the report.

Comments of Councillors:

§  Councillor Al-Nuaimi raised his concern in relation to the Greater Gwent (Torfaen) Pensions Fund and their source of funding.  The Monitoring Officer advised that if Councillor Al-Nuaimi wanted to raise a notice of motion, this would need to be done in accordance with the Standing Orders.  Councillor Evans felt that it was not appropriate to discuss the matter under this item.  Councillor Al-Nuaimi did not want to raise a notice of motion but wanted to add a comment.

§  Councillor Drewett supported the financial statement as a prudent measure.

§  Councillor Morris supported an investigation into the pension scheme. 

§  Leader added that this was a factual end of year report.  Whilst outside of the report presented to Council, the Leader confirmed that the Council had already engaged with the Greater Gwent (Torfaen) Pensions Fund and Newport City Council had a stronger voice moving forward regarding pensions.

Resolved:

Council noted the report on treasury management activities for the period 2023/24