Issue - meetings

Report of the Deputy Director of Finance and Section 151 Officer to follow,

The Committee considered a report of the Deputy Director of Finance and Section 151 Officer which presented the outturn for Treasury Management activity for the financial year 2019/20 and monitoring information in respect of the first quarter of 2020/21.

Members were advised that the capital programme was fully financed, and long-term borrowing was at 0. In March 2020 due to the pandemic there was a sudden drop in the Bank of England Base Rate which has had an impact on the returns the authority is receiving.

It was reported that the Council had also borrowed money at the start of lockdown, in order to ensure cashflow for any unexpected expenditure, in order to avoid the possibility of entering a large unarranged overdraft. However, once support had been given from the Government, the money had been moved to an account which provided interest. In response to a member enquiry, it was confirmed that the authority had borrowed £10 Million in late March 2020 and paid this back in June 2020, with a 2% interest charge.

Members were further advised that there had been two instances in the year in which counterparty limits were inadvertently breached. In neither instance was there any substantive increase in the Council’s exposure to risk, nor any financial loss.

Members expressed disappointment that the counterparty limits were breached and sought clarity on how the processes may be strengthened, in order to avoid the situation reoccurring in the future. It was explained that the procedures had been considered and an additional check had now been added to the process to ensure that the checks would be made on existing borrowing.

In response to a member enquiry, the Interim Chief Executive advised that the recruitment process for the Director of Finance post would be restarted over the next couple of months and reassurance was given that the current arrangements were working effectively.

RESOLVED: (Unanimously)

That the report be noted.