To receive a report from the Treasury and Investment Manager, PSPS Limited.

Sean Howsam, Treasury and Investment Manager (PSPS Limited) presented Members with the Q3 Treasury Report 2024/25, pages 71 to 96 of the Agenda refer.

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

The report covered the following areas;

• An economic update for the first three quarters 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 set 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.

Members were invited to put their comments and questions forward.  

·         In reference to the liquidation of the M&G Investments UK Property Fund, a Member requested an update on the timescale for the Council moving away from property funds, pages 88 and 89 of the Agenda refer.  In response, the Treasury and Investment Manager (PSPS Limited) confirmed that the M&G Investments UK Property Fund was in liquidation and was distributing assets as and when the properties were sold.  Members were further advised that a small repayment would be reported before the end of the financial year.

·         In reference to the timescale for liquidation of the other property funds held by the Council, the Treasury and Investment Manager (PSPS Limited) advised Members that the Council was liaising with the Council’s external treasury advisors and that a report was being presented to the Audit and Governance Committee in June 2025.

·         In refence to the loans that the Council had made to Invest East Lindsey, a Member queried whether all payments were up to date, page 86 of the Agenda refers.  In response, the Treasury and Investment Manager (PSPS Limited) advised Members that an invoice was raised for the interest for Q4 with payment due on 31st March 2025.  Members were further advised that following a recent negotiation of the payment schedule, the first repayment of £200,000 would be made on 31st March 2025.

·         The Chairman queried whether a future report would be presented to Full Council.  In response, the Treasury and Investment Manager (PSPS Limited) advised Members that a report would be presented to Full Council in the circumstances where a decision was required.

·         A Member queried whether the increase in government borrowing would have an impact on rates or gilts.  In response, the Treasury and Investment Manager (PSPS Limited) advised Members that the level of government borrowing did not unduly affect the Council and that the monetary policy committee made decisions in relation to rates which was fed into the markets for investment and borrowing.  Members were further advised that the overall global conditions for inflation and growth were the main factors that affected interest rates.

Following which it was,

RESOLVED:

That the report be noted.