The Director of Finance and IT will submit Document “S” which reports on the Councils Treasury Mid-Year Review.

The mid-year report has been prepared in compliance with CIPFA’s Code of Practice on Treasury Management, and covers the following:

• An economic update for the first six months of the 2022/23 financial year.
• A review of the Treasury Management Strategy Statement and Annual Investment Strategy.
• The Council’s capital expenditure, as set out in the Capital Strategy, and prudential indicators.
• A review of the Council’s investment portfolio for 2022/23.
• A review of the Council’s borrowing strategy for 2022/23.
• A review of compliance with Treasury and Prudential Limits for 2022/23.

Recommended -

That the details in Section 2 be noted and the report be referred to the 13 December 2022 Council meeting for adoption.

                                                                        (David Willis – 01274 432361)

The Director of Finance and IT submitted Document “S” which reported on the Councils Treasury Mid-Year Review.

The mid-year report had been prepared in compliance with CIPFA’s Code of Practice on Treasury Management, and covered the following;

·         An economic update for the first six months of the 2022/23 financial year.

·         A review of the Treasury Management Strategy Statement and Annual Investment Strategy.

·         The Council’s capital expenditure, as set out in the Capital Strategy, and prudential indicators.

·         A review of the Council’s investment portfolio for 2022/23.

·         A review of the Council’s borrowing strategy for 2022/23.

·         A review of compliance with Treasury and Prudential Limits for 2022/23.

It was reported that £15.5m of PWLB (Public Works Loan Board) loans were due to mature in January and February 2023 with an average interest rate of 6.125%. The new borrowing undertaken to date included £20m in April and £10m in October with the average rate of interest of 3.19%.

The Officer reported that the Council had two Lender Option Borrower Option (LOBO) loans, totalling £14.3m that have call date within the next few months. Due to the current volatility and increasing borrowing rates within the market, loans could possibly have the interest rate increased at the call date. The council would then have the option to accept the increased interest rate or repay the loans. Members were informed that the treasury team would monitor the situation and report back to this Committee at a future date on any loans that have been repaid.

It was reported that during the half year ended 30^th September 2022, the Council had operated within the treasury and prudential indicators set out in the Council’s Treasury Management Strategy Statement for 2022/23.

Members were advised that no difficulties had been envisioned for the current or future years in complying with these indicators and that all treasury management operations had been conducted in full compliance with the Council’s Treasury Management Practices.

Members raised questions as follows;

Referring to page 27 of the report, a Member sought further clarification on the Council’s borrowings.

The Officer reported that things have been tight with borrowing and repayments. There have been no short term investments but there have been short term borrowings. It was further reported that the situation has been difficult with covid grants.

Members queried about the interest rate when the LOBO loan was taken out.

It was reported that the loan was taken out in 2006 at the interest rate of 4.5%. This was discounted for a few years and then at fixed rate, it was a good rate at the point of taking the loan. Members were informed that the loan could either be redeemed or offer the next rate.

Members asked if Councils could lend to each other and if there was any outstanding amount/s owing to any other LA.

It was reported that Bradford Council has invested with other Local Authorities for a number of years however, the rates are not as good as elsewhere.

Members sought further clarification on figures carried forward from previous years.

The Officer did not have figures available.

Resolved -

That the details in Section 2 be noted and the report be referred to the 13 December 2022 Council meeting for adoption.

ACTION: Director of Finance and IT and Director of Legal and Governance