Agenda item

Treasury Management Year End Report 2021/2022


This report is to inform Governance & Audit Committee of treasury activities undertaken for the financial year 2021/22 and confirms, (other than interest rate volatility exposure), that all treasury and prudential indicators have been adhered to.

The report was presented to the Committee by the Head of Finance. 


Main Points:

·       Governance and Audit Committee comments would be included in the report submitted to Council. The report was Treasury Management and the management of our cash resources and investments of the Council’s surplus cash. This report was submitted to this Committee and to the Council twice a year, a midway report and final report on the 31st March. This report was concerned with the position as at 31st March 2022.

·       The Council was now in a different place due to the last 2 years as we had borrowed less than what we had expected, and we were investing more due to significant underspending and also there was not a delivery on the Capital Programme due to the pandemic. This meant there was a slow down on borrowing.

·       The Assistant Head of Finance stated that the final position was that the Council continued to be a short-term investor and short-term borrower to maximise our internal borrowing wherever possible.

·       The need to borrow had not gone away so we may need to undertake a significant amount of external borrowing to fund our Capital Programme aspirations which were significant. 

·       2020/21 and 2021/22 were not normal years due to the amount of government grant funding made available and that funding was provided up front and the cash was held on behalf of Welsh Government until it was utilised.

·       There was also a slippage in the Capital Programme where net borrowing decreased by £44.5m from £128.3m as at 31 March 2021 to £83.8m as at 31 March 2022. 

·       £33.5m was due to an increase in investments held which was a reflection of the grant money received.

·       The Treasury Activities and Indicatorsshown at Appendix B were a reflection of an unexpected position in terms of the level of investments held and there was no need for concern and these indications were set at a point in time.


Dr Barry stated that they understood the report clearly but asked about the future of the Capital Programme and were there any risks to service delivery going forward.

The Head of Finance confirmed that over the next 5 years the Council had a large commitment to borrowing and actual borrowing was following slowly. As the reserves diminished our commitment to borrowing would be higher. A new indicator this year that the Council agreed to, was a limit on the commitment to borrow, as we needed to stabilise our position, with a requirement to be prudent. The Head of Finance confirmed that there was £115m of Capital Projects in the pipeline to be delivered.

The Assistant Head of Finance stated that the Council was in the final year of the Capital Programme and work was ongoing on the new Five-Year Programme and a view would be taken on what was affordable. Looking at a model of different scenarios of what and what was not affordable in new expenditure each year would need to be revisited. The next update would be presented to Committee for consideration.

Councillor Mogford asked for clarification that the term government meant Welsh Government and the Assistant Head of Finance confirmed that it was Welsh Government being referred to and that grants were also received from other aspects of UK Government, but this aspect referred to Welsh Government.

The Chair referred to interest rate rises and whether this affected borrowing in future. The Head of Finance confirmed that there were ongoing discussions on interest rates, so the strategy allowed the Council to borrow in need of that cash. The advice was that rates were going up slowly but would fall back. The Loan book was a fixed term loan with the WLB and the advice was a little amount of variable short-term loans recycled tended to be cheaper.


The Governance and Audit Committee noted and endorsed the report.


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