Agenda item

Treasury Management 2021/22 Mid Year review

Minutes:

The Head of Strategic Finance and Property introduced a report setting out the council’s treasury management activities for the first six months of the  2020/21 financial year including the prudential indicators before consideration by the Executive and then by Council.  He summarised the council’s capital spending and revised status and how this had been financed.

 

The Chairman sought clarification in relation to changes to financing of the capital programme specifically the reference to “this direct borrowing need may also be supplemented by maturing debt and other treasury requirements”.  The Head of Strategic Finance and Property explained what this meant in relation to the one loan with the PLWB and the financial premium which would be incurred if this was redeemed. 

 

The Head of Strategic Finance and Property referred to the reduced amounts of cash held by the council which had been used to fund the capital programme.  He commented that there had been some slippage on a number of capital schemes, including Old River Lane, Bishop’s Stortford, Hertford Theatre and Hartham Common Leisure Centre and that these would be re-forecasted.  It was noted that Grange Paddocks had been completed and revenue from this leisure facility would be generated to meet borrowing costs. 

 

Councillor Curtis referred to capital expenditure on major projects and the assets which were depreciating.  He asked if the Council was making the necessary capital expenditure needed to counteract deprecation because the council was not investing in upgrades on its equipment.  He queried whether the council should be borrowing from the PLWB to help fund replacement equipment i.e. investing to save.

 

The Head of Strategic Finance and Property explained that there was a need to think about the overall affordability of schemes and what money could and should be spent and that taking on borrowing had a direct impact on the revenue account, which meant that savings had to be made elsewhere.  Anything which needed to be made safe, useable and habitable would be made, but from the viewpoint of enhancement and improvement he said that spending had to be matched with resources available.

 

Councillor Curtis expressed concern that deprecation was not recorded as an expense.  He felt that the council needed to think long term about large expenditures and how we dealt with this to maintain the services we provide.  The Head of Strategic Finance and Property explained how depreciation was dealt within the council’s accounts.   He added that in the next report on the agenda the Annual Infrastructure Funding Statement would show how the council could invest in community resources, including maintenance, via Section 106 monies.

 

The Chairman referred to the council’s Cash Flow Borrowing and the possible use of £15M from the council’s balances.  The Head of Strategic Finance and Property explained that where the council had reserves it could use this in the short term to finance capital expenditure. 

 

It was moved by Councillor Curtis and seconded by Councillor Ward-Booth that the recommendations, as detailed, be approved.  After being put to the meeting and a vote taken, the motion was declared CARRIED.

 

RESOLVED – that the report be considered and received.

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