Agenda item

The Committee considered a report of the Corporate Director of Resources which provided information on the treasury management outturn position for 2019/20 (for copy see file of minutes).

Mr Rudd referred to the Council receiving 1.05% return on investments and paying out 3.42% on debt.  He appreciated the amount of investments varied according to the year but asked if the Council did their best to minimise the difference between investment cost and the cost of borrowing.

The Head of Finance and Transactional Services confirmed that this is something that is regularly reviewed. It was not a simple equation of paying off loans at a higher rate of interest and taking out lower rated loans or having less investments to produce a budget positive position, as the Council would incur premiums or early redemption charges if it sought to repay loans early.  The premiums that applied to redeem loans early were based on the difference between the loan you were looking to repay and the interest rates at the current time so that authorities could not take out low interest rate loans to pay off high interest rate loans.

Councillor Kellett asked for information on which local authorities the Council had invested in and the Finance Manager explained that other Local Authorities could approach the Council through brokers when short of cash and better rates of interest were being achieved through lending money on a short term basis to other local authorities than from investments in banks and building societies.  She confirmed that she would share the identity of the individual authorities with him following the meeting.

Resolved:

That the report be noted.