The Interim Chief Officer – Finance, Performance and Change presented a report, in order to:

 · comply with the requirement of the Chartered Institute of Public Finance and Accountancy’s ‘Treasury Management in the Public Services: Code of Practice’ to produce interim Treasury Management reports;

 · seek Council approval the Council’s Treasury Management activities for 2021-22 for the period 1 April 2021 to 30 September 2021 and the projected Treasury Management Indicators for 2021-22.

She reminded Members, that treasury management is the management of the Council’s cash flows, borrowing and investments, and the associated risks. The Council is exposed to financial risks including the loss of invested funds and the revenue effect of changing interest rates. The successful identification, monitoring and control of financial risk are therefore central to the Council’s prudent financial management.

The Council’s treasury management advisors as Council was aware, was Arlingclose. The current services provided to the Council included:

·         advice and guidance on relevant policies, strategies and reports

·         advice on investment decisions

·         notification of credit ratings and changes

·         other information on credit quality

·         advice on debt management decisions

·         accounting advice

·         reports on treasury performance

·         forecasts of interest rates

·         training courses

The Interim Chief Officer – Finance, Performance and Change, confirmed that the TMS 2021-22 was approved by Council on 24 February 2021 with the Half Year Report scheduled to be presented on 20 October 2021.

A summary of the treasury management activities for the first half of 2021-22, was shown in table 1 at Appendix A to the report. Since the start of the financial year the Council has had surplus funds for investment, she added. The Council receives two instalments of Welsh Government core funding (Revenue Settlement Grant) during April at £12.6 million per instalment and was able to carry forward additional grant funding from 2020-21. As a result, the balance on investments at 30 September 2021 was £79.84 million with an average rate of interest of 0.06%. This was a significant reduction from the same time last year when the average rate was 0.24% and showed the impact of the reductions in interest rates as a result of the pandemic.

The Interim Chief Officer – Finance, Performance and Change, advised that Council has not taken long-term borrowing since March 2012. The TMS 2021-22 anticipated that the Authority would need to borrow £30.37 million during the year. However, this was on an assumption that the Council would have £43 million held in usable reserves that it could use in the short term to finance expenditure. As at 31 March 2021 the Council’s usable reserves stood at £114 million, an increase from £83 million as at 31 March 2020, which was not foreseen when the TMS was approved. The Council received £20.6 million from the Welsh Government Hardship Fund, which was more than had been anticipated during the year, as well as further additional grants from Welsh Government in the final quarter of 2020-21 of £8.9 million and capital receipts during the year of £2.9 million

Based on the current capital programme and the expected use of reserves allocated therein, it was expected that there will not be a requirement for new long-term borrowing in 2021-22. Details on forecast capital spend was provided in the Capital Strategy 2021-22, which was approved by Council on 24 February 2021 and the Quarter 2 Capital Monitoring report going to Council on 20 October 2021.

The Interim Chief Officer – Finance, Performance and Change referred Members to Table 4 in section 4 of Appendix A, which detailed the movement of the investments by counterparty types and showed the average balances, interest received, original duration and interest rates for the first half of 2021-22.

Details of the estimates for 2021-22 set out in the Council’s TMS, against current projections, were shown in Appendix A and these reflected that the Council is operating in line with approved limits.

The Council defines high credit quality as organisations and securities having a credit rating of A- or higher and Appendix B to the report, showed the equivalence table for credit ratings for Fitch, Moody’s and Standard & Poor’s and explains the different investment grades.

She concluded by advising, that CIPFA’s Code of Practice for Treasury Management required all local authorities to conduct a mid-year review of its treasury management policies, practices and activities. The outcome of this review is that there are no changes required in BCBC.

RESOLVED:                              That Council approved the Council’s treasury management activities for 2021-22 for the period 1 April 2021 to 30 September 2021 and the projected Treasury Management Indicators for 2021-22.