Agenda item

Treasury Management Six Monthly report 2021/22


The Mayor invited the Leader to introduce the above report.


The Leader advised colleagues that this was a compliance report to confirm that Treasury activities in the first half of 2021-22 accorded with the Treasury Strategy previously considered and set by Members. The report also compared activity with the year-end position for 2020-21 to indicate the movements and resulted causes.


The report presented the following information:


§  A reminder of the treasury strategy agreed

§  Details of borrowing and investment activity

§  Details of wider economic considerations such as the pandemic and the economic climate

§  An update to the International Treasury code on commercial investment funding

§  An examination of activity against performance, confirming compliance


The report had been presented to Governance and Audit Committee and Cabinet and was endorsed by them for onward consideration by full Council.


As at 30 September 2021 the level of borrowing decreased by £9.1m on 2020-21 levels to £144m. 


This was in relation to the repayment of a PWLB loan which matured in the first half of 2021/22, as at 3 September further borrowing to replenish this loan was not required. This may be needed to be covered by temporary borrowing before 31 March 2022. 


There were also a number of loans; Equal Instalments of Principal (EIP), which paid back principal over the life of the loan, and the interest associated with the loan went down as the principal outstanding reduced.


The level of investments also increased by £4.1m to £28.9m, meaning a decrease in net borrowing of £13.3m during the first half of the financial year to £115.1m.   Included within the investment figure was £13.9m held in the form of cash.


This was circa £6m less than year-end but due to the continuing pandemic the Authority has continued to keep more cash available at very short notice than is normal, to cover any unexpected calls on cash flow.


There was not much demand for very short- term borrowing within the marketplace, and in September rates on deposits below 14 days with the Debt Management Account Deposit Facility (DMADF) were still very low at 0.01%. The Authority had investment with other local authorities of £15m with slightly better, but low interest rates. It was anticipated that investments would reduce during 2021/22 as an alternative to borrowing until we reached the balance of £10m, which would remain invested for compliance with Markets in Financial Instruments and Derivatives Directive (MiFIDII).


As a result, no new long-term borrowing was required to be taken out in the first half of the financial year.


It was however anticipated that the Council would need to undertake additional borrowing on a short-term basis for the remainder of the year in order to cover normal day to day cash flow activity.  With current capital expenditure forecasts, it was however expected that there would be no specific requirement to undertake long-term borrowing this financial year, although external borrowing might be considered to manage interest rate risks and the Council’s longer term borrowing necessity.


Lastly, Prudential Indicators; the Authority measured and manages its exposures to treasury management risks using various indicators which could be found in Appendix B.  The report confirmed the Council continued to comply with the Prudential Indicators set for 2021/22.




That Council noted and approved the report on treasury management activities to 30 September 2021, approving in the process that activities were in line with the agreed Treasury Management Strategy for 2021/22.

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