The Chief Accountant presented a report to update the Committee on the outturn position for Treasury Management activities, Treasury Management and prudential Indicators for 2013-14 and to highlight compliance with the Council’s policies and practices prior to them being reported to Cabinet and Council.

She advised that the Council had complied with its legislative and regulatory requirements with full Council approval for the financial year 2013/14 as part of the Medium Term Financial Strategy (MTFS).  Council also approved the Half Year report in November 2013, and Quarterly Monitoring reports had also been approved by Cabinet.  She informed Members that the Authority no longer undertakes long or short term borrowings and no debt rescheduling was undertaken as there were no significant savings to be made.  There were, however, favourable cash flows during the year, which meant that on the balance sheet dated 31^st March 2014 investments totalled £10.5m with an average interest rate of 0.59%.  The bank base rate currently stood at 0.5%, which was an improvement on 0.51% at the beginning of the year.

She continued by informing the Committee that the Council was in the process of retendering for its banking services following the Co-operative Bank’s withdrawal from the Local Government  market, and the new banking contract would be in place from the 1^st January 2015.

            Finally, she advised the Committee that the Treasury Management function for 2013-14 had been reviewed by both Internal and External Audit; and Internal Audit had issued an audit opinion of ‘substantial assurance’ with no control weaknesses identified, or recommendations made.

One Member asked whether it was unusual not to have short term borrowing.

The Chief Accountant explained that it was not unusual given the way the Authority manages its finances, and given the fact that on the balance sheet it is a cash rich Authority, it therefore in effect, borrows from its own internal reserves.  She reported that the Authority had under-borrowed by approximately £40m due to the reserves being built up; however, she stressed that it would likely reach the stage where the Authority would eventually be required to borrow as the reserves dwindled, which was a familiar position with local authorities throughout Wales.

A Member drew attention to the table shown at Appendix A, on page 170 of the report, and requested an explanation to the net debt which had increased by £0.48m, against the investment which had decreased by £5.2m.

The Finance Manager explained that the gross debt position as at the 31^st March 2014 was £118m, which had only marginally changed from last year.  He added that variable rate investments would have reflected the cash the Authority had at the time, which meant a reduction in the cash invested.  The Chief Accountant explained that the reason for the increase in long term liabilities was the result of work on the HALO contract which was part way through the financial year 2013/14, and completion of the capital works on the Bridgend Recreation Centre.

RESOLVED:         That the Committee noted the Annual Treasury Management activities for 2013-14.