To receive a report from the Treasury and Investments Manager.

Sean Howsam, Treasury and Investments Manager presented Members with the Q1 Treasury Report 2024/25 to provide Members with an update on Treasury Management performance and activity to ensure best practice was maintained, pages 79 to 104 of the Agenda refer. 

The Treasury and Investments Manager detailed and highlighted pertinent information to Members from the Treasury Report on the Council’s “Treasury Management Strategy Statement and Annual Investment Strategy” at Appendix A, pages 85 to 104 of the Agenda refer.

Members were invited to put their comments and questions forward.

·         A Member queried comments made on divesting funds raised during an earlier training session and sought clarification whether the funds were the same funds noted on page 94 and 95 of the Agenda.  In response, the Treasury and Investments Manager confirmed that was correct.

·         In reference to Creditworthiness, a Member commented on the change in credit ratings over the quarter under review and queried whether credit rating changes had affected consideration of which parties to invest with, page 91 of the Agenda refers.  In response, the Treasury and Investments Manager advised Members that credit ratings were constantly under review and that changes were reported by Link Group, the Council’s Treasury Management advisors. 

The Treasury and Investments Manager further advised Members that in some instances, credit rating changes would not affect the recommended duration for investment and that when recommendations changed, the investment would be held to maturity to wait until the credit rating improved and to avoid financial penalties from requesting the investment back early.  The Treasury and Investments Manager further confirmed that there were currently no investments on the list affected by credit rating reductions.

·         A Member queried the status of repayment of loans to Invest East Lindsey.  In response, the Section 151 Officer informed Members that the Council was in the process of agreeing a full schedule of repayments with Invest East Lindsey and that some repayments had been made on time and others had been renegotiated following delays in proposals.  The Section 151 Officer further confirmed that information on repayment progress would be made available to Members in due course.

·         In reference to the list of financial institutions the Council had provided with cash investments, a Member queried the justification for investments to such a high number of local authorities, page 92 of the Agenda refers.  In response, the Treasury and Investments Manager advised Members that local authority investments were undertaken in accordance with the Council’s Treasury Strategy and were placed with approved management institutions that the Council could invest with.  The Treasury and Investments Manager assured Members that investment with local authorities was very secure as they were backed by the UK Government and that background checks were undertaken before investment decisions were made.

·         In reference to Property Funds (Capital Expenditure), a Member commented on the lack of success observed, page 95 of the Agenda refers.

·         In reference to the Sustainable Warmth Scheme in the General Fund Capital Expenditure 2024/25, a Member queried the revised budget figure of £15,078,000 and whether criteria issues had affected the deployment of grants, page 101 of the Agenda refers.

In response, the Section 151 Officer advised Members that clarification would be requested from the Group Manager for Climate Change and Environment.

·         A Member queried the frequency that ELDC had invested cash into other local authorities.  In response, the Treasury and Investments Manager provided Members with an example where the Council had lent funds prior to undertaking the premature Public Works Loan Board debt repayment in 2023 which had resulted in the Council’s need for short term borrowing.

The Section 151 Officer further advised Members that authorities were either net lenders or net borrowers and that ELDC were a cash rich authority and were not debt orientated.

·         A Member queried cash investments to the Police and Crime Commissioner (PCC) for Merseyside and whether the PCC’s Office had the same reporting standards as local authorities, page 92 of the Agenda refers.  In response, the Section 151 Officer assured Members that the PCC was covered by the same regulations and regulatory frameworks as local authorities and had an equivalent of a Section 151 Officer which held statutory responsibilities set out in legislation.

·         A Member further queried whether financing the Office of the PCC included financing the police.  In response, the Section 151 Officer advised Members that the Council was satisfied with lending the PCC’s Office money and could not comment on the ways in which the funds were being spent.

·         A Member queried whether ELDC would consider lending money to other Councils within Lincolnshire.  In response, the Section 151 Officer confirmed to Members that considerations would be made for any authority in the market for cash that were offering a good rate.

No further comments or questions were received. The Chairman thanked the Treasury and Investment Manager for his report.

Following which it was,

RESOLVED:

That the Mid Term Treasury Management Update 2024/25 be noted.