Agenda item

To receive a report from the Executive Director Resources.

Matt Bowmer, Interim Director Finance & Commercial introduced the report.

NOTED:

1.    The Council is continuing with the previous good practice of bring the draft strategy to the General Purposes Committee ahead of Cabinet and full Council at the end of February.

2.    Last years work has moved from a 2-3-year strategy to a 10-year strategy in line with the 10-year capital programme

3.    The format and content of the draft strategy is unchanged from last year.

4.    In this draft the borrowing numbers included are based on the period 8 2021 capital monitoring position. The monitoring position numbers will be updated prior to report going to Cabinet for the revised 10-year programme. Bench marking data will also be included on the investment section of the report.

5.    There are no changes of policy in the paper.

6.    The headlines are in section 9 of the report. The borrowing numbers continue to reduce, and these numbers are down from those presented in the half year report. The total borrowing outstanding as of 31 December is now at 916m.

7.    There is difference in figures under paragraph 9 (£914.4m) and 24 (916m) this is due to further borrowing from Salix. The figure is £916 the borrowing number continues to come down as the borrowing forecasts were revised based on slippage in the capital program this year. Similarly, the forecast TFR is coming down from previous forecasts and then it is forecast to increase to 1.466bn by 31 March 2022. MRP is forecast at 13.24

8.    This report is aligned to both the 10-year capital program and the 5-year medium term financial plan.

9.    There is no change in the report to the way the prudential indicators are calculated. They naturally follow the revised borrowing numbers and will be updated accordingly.

10. Update on numbers in paragraph 24, currently the overall borrowing is continuing to reduce. Historical borrowing level is down at 2.79%.

11.There was a consultation on PWLB borrowing rates with the CLG which finished just before Christmas. They have taken out the 1% premium and it is back down to 0.8% on to of guilts. There are some constraints can longer borrow from PWLB for commercial investments but can continue to fund regeneration.

12.Views on the proposals at paragraph 10 were requested.

Questions, comments and queries raised:

·         A comment was made that there is a need to impress how Meridian Water weaves all this together, it is an important issue for the valuations, it is a large part of the borrowings and there is also the risk register. It is a very important issue this committee needs very frequent updates on Meridian Water.

·          A further comment was made that the Councils debt is still very high considering accumulated prior to Covid and given the financial position on the revenue the amount of interest paying on the debt is concerning. Concern was expressed about the Council’s ability to deliver everything that it has said it will deliver and manage to pay off the debt and reducing that because of the amount of pressure on the revenue and day to day spending that residents rely on

·         From the report is the council’s strategy to keep asset base in front of the debt in terms of housing both Meridian Water and the HRA? On the HRA there is a 30-year business plan in place and the capital development, the development in the capital programme and the borrowing reflected in the report is within affordability of the overall 30-year plan.

·         A further comment was made that the level of debt at present is extremely concerning.

AGREED to note the draft Treasury Management Strategy