To receive the Mid Term Treasury report 2024/25.

The Treasury and Investment Manager, PSPS presented Members with the Mid-Term Treasury Management Report 2024/25 in relation to the Council’s Treasury Management Strategy Statement and Annual Investment Strategy at Appendix A, pages 217 to 240 of the Agenda refers and covered the following areas;

·         An economic update for the first half of the 2024/25 financial year;

·         The outlook for the remainder of the financial year along with interest rate forecasts;

·         A review of the Treasury Management Strategy Statement and Annual Investment Strategy;

·         The Council’s capital expenditure, as asset out in the Capital Strategy, and prudential indicators;

·         A review of the Council’s Investment portfolio for 2024/25;

·         A review of the Council’s borrowing strategy for 2024/25;

·         A review of compliance with Treasury and Prudential Limits for 2024/25.

The Treasury and Investment Manager advised Members that the Annual Treasury Report 2024/25 would be presented to the next Meeting of the Audit and Governance Committee once the accounts had been finalised.

Members were informed that the report referred to a key element of the Council’s Governance Framework and therefore represented an important contribution to the evidence trail in support of the Annual Governance Statement 2024/25.

Members were invited to put their comments and questions forward.

·         A Member queried whether the Council had concluded providing loans to Invest East Lindsey and whether they were up to date on payments, page 231 of the Agenda refers.  In response, the Treasury and Investment Manager confirmed to Members that some of the loans had met their maturity date, however some had been extended due to delays in the sales of properties whilst some of the loans had been repaid.

·         A Member further queried in which scheme the funding was set aside for the resurfacing of the Broadway Carpark in Sutton on Sea, page 239 of the Agenda refers.  In response, the Section 151 Officer advised Members that the details would be clarified and brought back to the Committee at a future Meeting.

·         In reference to the Council’s Capital Financing Requirement (CFR) for 2024/25 of £17.526 million, the Chairman noted the drop in £4.5 million in the value of property funds and queried whether the £17.526 million was the Minimum Revenue Provision (MRP), page 226 of the Agenda refers.  In response, the Treasury and Investment Manager advised Members that it was not the MRP and was the unfinanced capital expenditure that the Council had incurred on property funds that had decreased in comparison to previous years.  

·         The Chairman further queried whether the financing requirement related to the original price of the property fund.  In response, the Treasury and Investment Manager confirmed to Members that the value was based on the purchase price less any MRP contributions that the Council had made.   The Treasury and Investment Manager further advised Members that voluntary revenue provisions were also taken into account and that the contributions could be reversed to increase the Council’s financing requirement if the property fund valuations increased. 

·         In relation to the UK Shared Prosperity Fund (UKSPF), a Member queried whether the funds had a spending timeline and whether there were requirements when reaching the date of completion, page 239 of the Agenda refers.  In response, the Section 151 advised Members that timelines varied between funding bodies and were also dependent on Government requirements.  Members were further advised that the UKSPF spending was expected to reach completion by the end of March 2025 and that good progress was being made in liaison with the government.  The Section 151 Officer further advised Members that the Towns Funding had a longer timeline imposed and was expected to reach completion by March 2026.

·         A Member further queried whether there was considerable risk in the projects reaching fruition.  In response, the Section 151 assured Members that the Senior Leadership Team (SLT) closely monitored and reviewed the projects on a monthly basis and that some projects were undertaken with a third party who held the spending responsibilities rather than the Council.

·         A Member queried the risk profile and process for investing with other local authorities, page 230 of the Agenda refers.  In response, the Treasury and Investment Manager advised Members that lending to other local authorities was relatively risk free.  The Treasury and Investment Manager further explained to Members that money loaned would increase other authorities borrowing capacity and that the risks were managed by undertaking background checks to determine the individual risk of an authority before decisions were made to provide a loan.  

·         The Treasury and Investment Manager further advised Members that an increase in borrowing requests was seen towards the end of the financial year when authorities were short on cash and that rates increased when there was more competition for the funds.

There were no further comments or questions received.

The Chairman thanked the Treasury and Investment Manager for an informative report.

Following which it was,

RESOLVED:

That the Mid Term Treasury Report 2024/25 be noted.