Agenda item

Consider report by Acting Chief Financial Officer.  (Copy attached.)

2.1       There had been circulated copies of a report by Acting Chief Financial Officer that presented the annual treasury management activities undertaken during the 2021-22 financial year.  The CIPFA Code of Practice on Treasury Management in the Public Services (the Code) required an annual report on treasury management to be submitted to Council following the end of each financial year.  The report highlighted the Council’s treasury activity undertaken in the year ended 31 March 2022 and the performance of the Treasury function.  Appendix 1 of the report is the annual report of treasury management activities for 2021-22 and contained an analysis of performance against targets set in relation to Prudential and Treasury Management Indicators.  The performance comparisons reported were based on the revised indicators agreed as part of the mid-year report approved on 16 December 2021.  The Appendix showed the Council’s borrowing requirement to fund the capital investment undertaken during 2021-22, how much the council actually borrowed against the sums budgeted and the level of external debt within approved limits.  During the year, the Council had, where possible, deferred borrowing using surplus cash rather than undertaking new borrowing.  However, in March 2022, the Council did proactively undertake long-term borrowing of £20 million toward the financing of the capital program before interest rates were increased by the Bank of England, saving £3.94m over the life of the loan on a comparable basis to 2 November 2022 rates.  Treasury management activity for the year had been undertaken in compliance with approved policy and the Code.  The Council remained under-borrowed against its Capital Financing Requirement (CFR) at 31 March 2022.

2.2       The Acting Chief Financial Officer presented the report and answered Members’ questions.  The Acting Chief Executive explained that overnight rates were a means to manage Council’s cash in a proactive way to maintain an appropriate overdraft facility and put surplus cash to a positive third party.  The approach to the investment strategy was to address the security of SBC money, assure liquidity and then, as a tertiary priority, obtain yield on investments.   With regards to borrowing undertaken on 10-year fixed-rate terms, it was explained that the rates on which money was borrowed at would be fixed for the duration of the 10-year term and that treasury management advisers, Link Asset Services, would be consulted on re-borrowing.  The Chief Officer Audit and Risk advised that Link Asset Services recently held a training seminar on Capital Strategy and Treasury Management to support the learning and development of new Members to the Audit Committee and was also a useful refresher for continuing Members; the seminar was an open invite to all Members.  Link Asset Services expressed willingness to share the training slides on request for Members of the Committee and the wider Council that weren’t able to attend.  Members raised a number of typing errors in the Report that would be addressed before being presented to Council.

DECISION

AGREED:

(a)       That treasury management activity in the year to 31 March 2022 was carried out in compliance with the approved Treasury Management Strategy and Policy as detailed in this Report and in Appendix 1 of the Report; and,

(b)       To address typing errors in the Report before presented to Scottish Borders Council.