Agenda item

To receive the report from the Executive Director Resources on the Treasury Management Mid Year Position.               Key Decision Reference:  KD: 5214

Council is asked to consider and note the 2020/21 Mid-Year Treasury Management position and approve the additional policy for 2020/21 Enfield Treasury Management Strategy Statement. 

This report is due to be considered by Cabinet on 11 November and recommended to Council for approval. 

Councillor Maguire moved and Councillor Caliskan seconded the report of the Executive Director Resources on the Treasury Management Mid-Year position. 

NOTED:

1.            Councillor Maguire in proposing the report highlighted the following: 

·         This was the half year report to the end of September 2020.

·         It had been considered by Cabinet on 11 November 2020.

·         The Council was being asked to approve an additional capital policy for the 2020/21 Enfield Treasury Management Strategy Statement. This policy concerned the working capital policy including where and when to make loans to third parties. 

·         All treasury management activity had been within approved limits and following prudential indicators. 

·         The audited borrowing Capital Financing Requirement Forecast for the 31 March 2020 was £1,072m.  This has been revised for the 31 March 2021 from £1,238m to £1,288m due to the pandemic and general capital expenditure slippage. 

·         There had been a reduction of £61.6m in borrowing outstanding and net borrowing with a revised forecast of £1,058. £200m less than the original budget.  The Council has spent less, due to work slowing down and there have been no new loans. 

·         The Council had approximately £1 billion worth of long term borrowing varying slightly between April and September. 

·         The amount of gross interest paid was forecast to be £27.3m for this financial year. 

·         Outstanding loans were set out in Table 5 to the report.  Where possible loans have been refinanced on better terms. 

·         The Council had 95 loans spread over a 50 year period. 

·         Table 3 set out the borrowing position.  Table 4 set out the Capital Financing Requirement.  Table 5set out the cost of borrowing.  Table 6 profiles maturing loans.  Table 7 contains Treasury Investments.

2.            Comments of the majority opposition group: 

·         Concern about the high levels of borrowing which will have to be repaid by future generations. 

·         Concern that Enfield was on track to become the Croydon of North London.

·         Disappointment that the Meridian Water had been so slow to get going.  It should have been generating more income by this stage. 

·         Disappointment that Energetik, the Council company, had not yet made a profit and that its directors were being paid too much. 

·         A forecast of over £1 billion debt was too high and the £27m cost of servicing the debt repayments would have to be taken from the revenue budget which would leave less money for other services. 

·         Money spent on Housing Gateway had not resulted in the building of new houses.  The Council now had one of the highest levels of temporary housing in London. 

·         Concern about the deficit in the dedicated schools grant. 

3.            Comments of the minority opposition group:

·         The Coronavirus pandemic had been a mixed blessing as it had saved the Council money in some areas.

4.            Comments of the majority group: 

·         The spending on the capital programme was being closely monitored. The report showed clear evidence of sound financial management. 

·         The Council was supporting the local economy and was investing including in new housing, new lighting as well as Meridian Water.

·         Borrowing this year had been less than was planned due to the pandemic.

·         The report showed that the Council was being transparent in its financial affairs. 

·         The Council had delivered and would continue to deliver for the borough, by investing in the future.  Construction was underway at several sites.  The Government had congratulated the Council for the speed of development and Enfield had been given awards for recent infrastructure projects. 

·         Money being spent was for capital projects.  The law did not allow the Council to spend revenue money for capital projects. 

·         Energetik would make returns, but in the longer term.  Major infrastructure was investment in the longterm future.  Directors should be adequately remunerated for their work. 

5.            The summing up by Councillor Maguire that Enfield should not be compared with Croydon which was in a very different financial position.  In Croydon treasury indicators had been very poor over the last 3 years.  Enfield was much stronger financially.  A more appropriate comparison could be made between Croydon and the Conservative administrations in Somerset and Northampton, which were on the brink of bankruptcy.  The Council had set out its capital ambitions clearly in a ten-year financial strategy. The cost of borrowing had been shown to be affordable.  The Labour administration was keen to improve the borough.

During the discussion on this item, Councillor Stewart proposed and Councillor Caliskan seconded a motion to extend the time available to discuss reports by 15 minutes.  This was agreed without a vote. 

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

For:  41

Against: 17

Abstentions: 4

AGREED

·         To note the contents of the report.

·         To approve the additional policy for 2020/21 Enfield Treasury Management position.

·         To approve the additional policy for 2020/21 Enfield Treasury Management Strategy Statement attached as appendix 1 to the report.