A report by the Director of Resources advised that the Authority’s treasury management activity was underpinned by CIPFA’s Code of Practice on Treasury Management (“the Code”), which required the production of an annual Treasury Management Strategy Statement on likely financing and investment activity. The Code also recommended that Members were informed of treasury management activities at least twice a year.

The report fulfilled the Authority’s legal obligation under the Local Government Act 2003 to have regard to both the CIPFA Code and the Ministry of Housing, Communities and Local Government (MHCLG) Investment Guidance.

At the Mid-Year point the Treasury Management budget forecast for this year was for a balanced outturn. Whilst the low interest rate environment continued to impede investment interest, this shortfall was being offset by lower interest costs on Treasury Management loans.

In response to a Member’s question the Director explained to the Committee the principles behind inter authority lending, which many other authorities did also, and how this was of benefit to the Council, in that it did make money for the Council and as far as she was aware, no authority had ever defaulted on a loan.

She also elaborated on the LOBO (Lender’s Option Borrower’s Option) loans which the Council had entered into in the 1980/90’s, and which, at the time, had very good long term fixed rates of interest, although if the Council wanted to redeem these loans now this often had very significant penalties. Work was ongoing with the Council’s financial advisers on the possibility of replacing some of these with less costly loans and for some of the small value loans negotiations had been successful in achieving repayments without the high penalties.

With regard to the interest rate on the Capitalisation Directive the Director agreed that she would provide this information for all the Committee.

On a motion by the Chair, seconded by Councillor Yvonne Nolan, it was -

Resolved – That the Treasury Management Mid-Year Report for 2021/22, be noted.