To confirm and sign, as a correct record, the Minutes of the meeting of the Committee held on 3 February 2022 (Appendix ‘A’).

The minutes of the meeting from 3 February 2022 were confirmed and signed as a true record.

Apologies were received from Cllrs S. Lewis and N. Prescot.

Members are invited to declare any disclosable pecuniary interests or other registrable and non-registrable interests in items on the agenda.

No declarations of interest were made.

The Corporate Head of Finance advised that the report set out the treasury performance of the Council during the last financial year.  Members of the Committee had the opportunity to make any recommendations ahead of the report being presented to the following week’s Corporate Management Committee.

The Corporate Head of Finance advised that the Council’s underlying need to borrow was known as the Capital Financing Requirement and represented the level of unfinanced capital expenditure.  Part of the Council’s treasury activity was to address the funding requirements for this borrowing need and organise the Council’s cash position to ensure that sufficient cash was available to meet capital plans and cash flow requirements.

Last year, the Council maintained an under-borrowed position, meaning that the borrowing need was not fully funded with loan debt, as cash supporting the Council’s reserves, balances and cash flows, was used as an interim measure, which was known as “internal borrowing”.

By using Internal Borrowing, at the year end the Council was “under borrowed” by £47m saving the Council approximately £1m in loan interest payments over the last 12 months.

During the year the Council repaid a £40m loan to the PWLB and replaced it with the prearranged £40m annuity loan at 2.88% with Phoenix Life as agreed by Corporate Management Committee in 2018.  This represented the Council’s first and only Annuity loan which repays an element of the principal sum borrowed each year rather than repayment of all the principal at the loan maturity date.

In total the Council took out additional loans of £30million during the year which were used to fund the Magna Square development.

The Corporate Head of Finance added that general return on the Council’s investment remained low with the bank Base Rate remaining at 0.1% until December when following a series of increases, it settled at 0.75% at the end of the year. 

Investment balances had been kept to a minimum through the agreed strategy of using reserves and balances to support internal borrowing, rather than borrowing externally from the financial markets.  Such an approach had provided benefits in terms of reduced interest payments and reducing counterparty risk exposure, by having fewer investments placed in the financial markets

The Council’s interest rate performance during last year, was 0.36% which compared favourably with the Council’s benchmark rates, and was largely thanks to investment in its two Pooled Funds.  These funds were long-term in nature and over long-term horizons they provided investors with strong levels of interest in the form of dividends

Another good performer for the Council had been its investment with the Funding Circle, a platform for lending to small businesses.  This investment vehicle had averaged a 5% return over the life of the investments, but unfortunately it was now being wound down for retail investors – of which the Council is one.

Investments to the value of £229m were made during the year with a year-end balance of £77m.

Taking both borrowing and investment together overall the Council made a £2.4m  ...  view the full minutes text for item 133.

The Council’s constitution states that Overview & Scrutiny Select Committee must report annually to full Council.  The Democratic Services Officer presented the annual report that for Committee’s consideration to recommend to July’s full Council meeting.

The Select Committee had considered a number of items over the previous twelve months, including two call ins relating to the PSPO in Egham and the appointment to outside bodies. 

Other items on the Select Committee’s agenda had been related to Treasury Management and progress towards savings, with a further update on progress towards savings expected at October’s Committee meeting.

A Member queried the wording around the call-in relating to outside bodies, believing that Members had not misinterpreted advice around not being able to make a speech in support of their own nomination, but rather they had been told they were unable to do so.

It was agreed to tweak this wording for the Chair’s consideration, who would decide whether he was supportive of an amendment to the report at full Council.

Another Member asked about the regularity of Treasury Management training for Members.  Whilst it was agreed at a previous meeting that training would take place every other year, this would be kept under review given the potential annual turnover of membership of the Committee.

            Recommended to full Council that –

the Overview & Scrutiny Select Committee annual report be received and adopted