Agenda item

Treasury Management Outturn Report 2019/20

To receive a report from the Executive Director of Resources presenting the Council’s Annual Treasury Management Report for 2019 - 20 in accordance with Treasury Management Practices. 


Council is asked to approve the recommendations in the report. 


It is a regulatory requirement for Council to receive this report by 30 September each year. (Key Decision Reference Number: KD: 5152)


Councillor Maguire moved and Councillor Caliskan seconded the report of the Executive Director Resources presenting the Council’s Annual Treasury Management Outturn Report for 2019-20.




1.            The report had been considered by Cabinet on 15 July 2020 and recommended onto Council for approval.


2.            The points raised by Councillor Maguire proposing the report: 

·         The outstanding borrowing to 31 March 2020 was £968.9 including £240m long term borrowing from the Public Works Loan Board (PWLB) which had replaced higher interest loans. 

·         In March 2020 £80m PWLB borrowing was raised with an average rate of 1.45% - loans maturing in 50 years for HRA projects taking advantage of the low interest rate. 

·         Capital financing was £48.9m less than forecast and there had been no debt rescheduling. 

·         The table on the first page of the report summarises the Council position.  Table 1 contains the balance sheet summary, table 2 the Treasury Management Summary, Table 3 the Treasury Management Borrowing Summary, Table 4 Capital Financing Requirements, Table 5 Cost of Borrowing.

·         Capital finance had increased and would increase further to pay for capital projects

·         The Council had 90 loans repayable over 50 years which helps to spread the risk.

·         During the year the Council’s investment balance ranged between £5million and £147 due to timing differences between income and expenditure.

·         Enfield had not invested in out of town shopping centres, an issue that had been highlighted by the Public Works Loans Board, unlike some boroughs

·         Approving the removal of the 75% cap on total aggregate investments would give much needed flexibility and increasing money limits will enable the Council to earn more from cash deposits.


3.            The following highlighted by the Majority Opposition Group:     

·         Concern about the high levels of borrowing which currently stood at nearly £1billion. 

·         Concern that the Council’s money belonged to the people of Enfield and should be spent prudently.  Current debt averaged £3,500 per resident.

·         The view that too much was being spent on projects such as Meridian Water and that the properties being built would be out of the reach of ordinary Enfield people.

·         Concern that £3.2m was being spent from the current revenue account to service the debt.  The view that this should be being spent on day to day services instead.

·         Post Covid, there was a risk that interest rates would increase.

·         Current levels of borrowing were felt to be unsustainable and could lead to financial problems in the future.  The administration was leaving a legacy of debt which would have to be paid back by future generations.  

·         Concern that borrowing had increased by £147m in one year.

·         That the Council should be looking to the private sector as a source of investment, rather than doing things themselves.

·         The view that projects such as Meridian Water, Elizabeth House and Reardon Court were being poorly managed and would have succeeded better if the private sector had been involved. 

·         Commendation for the clarity of the report. 

·         Reprofiling and rescheduling debt was only putting things off into the future, at great cost.

·         Acknowledgement that investment was necessary but that there was currently too much waste and a lack of proper management. 


4.            The following highlighted by the Majority Group: 

·      The Council was borrowing to invest in the future.  To argue against was to say that investment in education, housing and town centres for example was not necessary.

·      The Council was committed to sound long term financial management.  Borrowings were being balanced by low interest rates.  This would create certainty over time and would enable the Council to deliver on its long-term plans.

·      Local government was under severe financial challenge.  The Opposition should be lobbying the Government to persuade them to cover the extra £63m costs, generated by the pandemic that they had promised but reneged on, and to properly fund local authorities

·      Making investments now was part of the strategy for the Council’s capital programme and saved money in the future.

·      The report provided clear evidence that the Council’s finances were sound and were being managed effectively and efficiently alongside measures for income generation. 

·      The Government borrowing figures were enormous: £2trillion at the latest estimate.  Borrowing had been increasing ever since 2010 when the Conservatives had come to power.  Billions had been wasted on failed procurements.  The poorest were having to fund this through taxation.

·      The first homes at Meridian Water would be ready in 2024.  The Council would continue to invest for residents.

·      The level of interest that the Government is paying on its huge debts is shocking and there will be nothing to show for it. 


5.            The summing up from Councillor Maguire that she did not understand the opposition.  She felt that they did not want change, they did not want investment, that they were living in the past.  Since 2010 debt had increased but the Government had not invested in anything.  If you want to build houses, then you will have to borrow.  But this leaves a legacy of better homes and neighbourhoods.  Debt spread over long periods enables investment. 


Following the debate, the recommendations in the report were put to the vote and agreed with the following result:


For:  35

Against: 15

Abstentions: 2




1.            To note the contents of the report.

2.            To approve the removal of the cap on total aggregate investments in money market funds (MMFs)

3.            To approve a new money limit of £25m for each eligible counter party (Bank and MMF) meeting the Council’s current criteria for a high-quality institution. 

Supporting documents: