This report was introduced by the Chief Officer –
Finance, Performance and Change and its purpose was to
update Members on the outturn position for Treasury
Management activities for 2022-2023, the indicators for the same
year and to highlight compliance with the Council’s policies
The key points were as
- The treasury
management strategy for 2022-2023 was approved by Council on 23rd
February last year.
- The report outlines
the economic context within which the Treasury Management activity
took place last year. The issues included:
- The war in Ukraine
kept global inflation rates high.
- The economic backdrop
in January to March 2023 was characterised by high energy and
commodity prices, high inflation which has impacted on household
budgets and spending. The Consumer Price Index rose to 10.1% in the
12 months to March 2023.
- Interest rates were
increased on a number of occasions during the year to try to curb
inflation. The bank rate started the year at 0.75% and increased 8
times during the year to 4.25% as of 31st March 2023.
- A summary of Treasury
Management activities during last year is shown in Appendix A.
Table 1 in the report summarises the Council’s position with
regard to External Debt and Investments. In summary:
- No long-term debt was
taken out during the year.
- No debt was
rescheduled during the year as there was no financial benefit to
the Council to do this. This will be kept under review in the
- There was a small
increase in the number of Salix interest free loans the Council
- The total external
borrowing that the Council is managing was £99.93 million at
the end of March 2023.
- The balance of
Investments at the year-end was £74.5 million which is
reduction of £10 million as compared with March
- The income being
earned via the investments is increasing as the base rate has
- The average interest
rate increased from 0.43% in 2021-2022 to 2.55% in
- When investing the
Council’s monies, due regard is given to ensure the security
and liquidity of the investments before seeking the highest rate of
In the discussion that followed, members
commented as follows:
- That the report would benefit from a
summary of highlights and a few graphs. He thought this would
assist residents trying to understand the Council’s approach
to treasury management. In response, the Chief Officer –
Finance, Performance and Change noted that this was a very
technical area and there were certain things that have to be
reported in particular ways to comply with the requirements in this
area but there was no reason why summaries could not be
- Whether there was an opportunity to
settle the Private Finance Initiative (PFI) debt related to the
secondary school in Maesteg from reserves. In response, the Chief
Officer – Finance, Performance and Change suggested she would
have to look at the details of that particular agreement to see
whether or not that Is a possibility and also, given the way
interest rates are changing, whether there were advantages or
otherwise to us in repaying it.
- That the training offered by
officers to help members understand reports of this kind was
extremely valuable. In response, the Chairperson noted that
officers put in a tremendous amount of time for training but if
further training was needed it could be undertaken. The Chief
Officer – Finance, Performance and Change added that it would
be helpful to offer refresher training annually for issues like
treasury management as members do not receive the reports very
noted the annual treasury activities for 2022-23.
noted the actual Treasury Management Indicators for 2022-23 against
those approved in the Treasury Management Strategy 2022-23.