Agenda item

Consideration was given to the Annual Treasury Management Report, presented by Natalia Govorukhina, Head of Corporate Finance, which was the final treasury report for 2024/25. Its purpose was to review the treasury activity for 2024/25 against the Strategy agreed at the start of the year. The report also covers the actual Prudential Indicators for 2024/25 in accordance with the requirements of the Prudential Code.

The Council received an Annual Treasury Strategy Report in advance of the 2024/25 financial year at its meeting on 28th February, 2024, and the Committee received a mid-year report at its meeting on 26th November, 2024, representing a mid-year review of treasury activity during 2024/25. In addition, quarterly updates were received by Audit Committee on 26th September, 2024 and 11th March, 2025.

This report meets the requirements of both the CIPFA Code of Practice on Treasury Management and the CIPFA Prudential Code for Capital Finance in Local Authorities.

The Council was required to comply with both Codes through regulations issued under the Local Government Act 2003.

Appendix 1 of the report submitted gave a summary of the Prudential Indicators for the Council.

The underlying economic and financial environment remained difficult for the Council to predict.  Inflation had fallen back from historic highs in recent years and the Bank of England had started to cut interest rates.  However, the cost of long term borrowing form PWLB had increased during the years.  The main challenge with regard to investments related to concerns over investment counterparty risk.  This background encouraged the Council to continue maintaining investments short-term and with low risk counterparties.

During 2024/25 the Council continued to pursue its short-term borrowing strategy in line with advice from its Treasury advisers.  Borrowing was taken only as needed and would be refinanced in the next few years.  This had resulted in a significant increase in the net under borrowed position.  The Council would continue to monitor the interest position with a view to taking out further long term borrowing if there were dips in the long term borrowing rates but currently was utilising short-term borrowing to cover immediate borrowing need in anticipation of lower rates in the future.

Taken together, the reduced borrowing need, additional returns on investments, and further slippage on the Council’s Capital Programme had enabled the Council to transfer £8m underspend on the 2024/25 Treasury Management budget to support the Council’s 2024/25 overall outturn position. 

The report also included a table showing debt repayments during 2024/25 to other local authorities as had been requested by previous Audit Committee Members.

It was noted that the report would be considered by Cabinet at its meeting on 7^th July, 2025.

Discussion ensued on the report with the following issues raised/clarified:-

-        Cash flow was managed on a daily basis with debts maturing and repaid in accordance with the agreed terms

-        Assurance given that all borrowing was in line with the Treasury Management planning and cash flow management

-        Regular Treasury Management meetings were held where the cash flow position was reviewed/forecast for the coming months

Resolved:-   That the Treasury Management Prudential Indicators outturn position, as set out in Section and Appendix 1 of the report submitted, be noted.