Item 8 Appendix 6 - Treasury Management Strategy and Annual Investment Strategy
West Dunbartonshire Council · 12 June 2024
Back to Audit Committee — 12 June 2024 and its agenda
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West Dunbartonshire Council Prudential and Treasury Indicators General Services 32,799 76,757 59,808 27,507 14,416 11,089 11,041 10,781 10,838 10,738 Capital receipts (0) 0 0 0 0 0 0 0 0 0 Capital grants 19,492 28,081 20,038 8,477 6,722 6,722 6,722 6,722 6,722 6,722 Revenue 250 250 0 0 0 0 0 0 0 0 Other funding 0 0 0 0 0 0 0 0 0 0 Net financing need for the year 13,057 48,426 39,770 19,030 7,694 4,367 4,319 4,059 4,116 4,016 HRA 55,680 73,385 77,676 55,760 47,898 33,450 21,917 22,355 21,854 21,854 Capital receipts 0 0 0 0 0 0 0 0 0 0 Capital grants 9,885 13,004 8,941 4,573 4,010 3,074 0 0 0 0 Revenue 0 0 0 0 0 0 0 0 0 0 Other funding 0 0 0 0 0 0 0 0 0 0 Net financing need for the year 45,795 60,381 68,735 51,187 43,888 30,376 21,917 22,355 21,854 21,854 General Services 32,799 76,757 59,808 27,507 14,416 11,089 11,041 10,781 10,838 10,738 HRA 55,680 73,385 77,676 55,760 47,898 33,450 21,917 22,355 21,854 21,854 Capital Expenditure 88,479 150,142 137,484 83,267 62,314 44,539 32,958 33,136 32,692 32,592 Capital receipts (0) 0 0 0 0 0 0 0 0 0 Capital grants 29,377 41,085 28,979 13,050 10,732 9,796 6,722 6,722 6,722 6,722 Revenue 250 250 0 0 0 0 0 0 0 0 Other funding 0 0 0 0 0 0 0 0 0 0 Net financing need for the year 58,852 108,807 108,505 70,217 51,582 34,743 26,236 26,414 25,970 25,870 Capital Financing Requirement CFR – General Services 396,061 445,645 492,739 517,478 534,331 542,753 546,909 551,141 555,136 559,064 CFR – HRA 396,061 445,645 492,739 517,478 534,331 542,753 546,909 551,141 555,136 559,064 Total CFR 792,123 891,290 985,477 1,034,956 1,068,662 1,085,506 1,093,818 1,102,282 1,110,272 1,118,128 Movement in CFR 49,745 99,168 94,187 49,479 33,705 16,844 8,312 8,464 7,990 7,857 Movement in CFR represented by Net financing need for the year (above) 58,852 108,807 108,505 70,217 51,582 34,743 26,236 26,414 25,970 25,870 Loans Fund Review - - - - - - - - - - Less scheduled debt amortisation and other financing movements (9,107) (9,639) (14,318) (20,738) (17,877) (17,899) (17,923) (17,950) (17,980) (18,013) Movement in CFR 49,745 99,168 94,187 49,479 33,705 16,844 8,312 8,464 7,990 7,857 Table A - Net Capital Financing Need General Services and HRA Shown Separately £000 Forecast 2023/24 Forecast 2024/25 Forecast 2025/26 Forecast 2026/27 Forecast 2027/28 Forecast 2031/32£000 Forecast 2028/29 Forecast 2029/30 Forecast 2030/31 Forecast 2031/32 Financed by: Forecast 2024/25 Forecast 2025/26 Forecast 2026/27 Forecast 2027/28 Forecast 2028/29 Forecast 2029/30 Forecast 2030/31 Forecast 2023/24 General Services and HRA Combined £000 Forecast 2023/24 Forecast 2024/25 Forecast 2025/26 Forecast 2026/27 Forecast 2031/32 Financed by: Forecast 2027/28 Forecast 2028/29 Forecast 2029/30 Forecast 2030/31 Forecast 2024/25 Forecast 2025/26 Forecast 2026/27 Forecast 2027/28 Forecast 2028/29 Forecast 2029/30 Forecast 2030/31 Forecast 2031/32 Financed by: Table B - Capital Financing Requirement £000 Forecast 2023/24 Forecast 2032/33 Forecast 2032/33 Forecast 2032/33 Forecast 2032/33
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West Dunbartonshire Council Prudential and Treasury Indicators Table C - Internal Loan Fund Repayment Profile (excluding PPP repayments) £M £M £M Under 12 months 4.023 6.836 10.859 2 years to 5 years 16.888 27.080 43.968 6 years to 10 years 23.520 38.567 62.087 11 years to 15 years 27.967 30.964 58.931 16 years to 20 years 25.956 38.527 64.483 21 years to 25 years 18.217 42.462 60.679 26 years to 30 years 12.574 25.349 37.923 31 years to 35 years 9.941 5.304 15.245 36 years to 40 years 11.526 3.250 14.776 41 years to 45 years 12.257 3.378 15.635 46 years to 50 years 14.057 4.785 18.842 51 years to 55 years 18.900 7.114 26.014 56 years to 60 years 24.414 8.395 32.809 60 years plus 134.080 22.244 156.324 Total 354.320 264.255 618.575 General Services (Exc PPP) 10.64% 12.21% 11.83% 11.07% 8.10% 6.96% 6.83% 7.22% 7.34% 7.50% General Services 15.19% 16.69% 16.22% 15.32% 12.20% 10.90% 10.65% 10.90% 10.83% 10.79% HRA 38.22% 42.68% 41.12% 38.57% 46.79% 38.34% 37.55% 36.63% 34.89% 33.01% External Debt Debt at 1 April 620,831 670,883 768,637 863,570 913,764 948,204 965,806 974,899 984,171 992,999 New Borrowing - CFR 50,052 97,754 94,933 50,195 34,440 17,601 9,094 9,272 8,828 8,728 Debt at 31 March 670,883 768,637 863,570 913,764 948,204 965,806 974,899 984,171 992,999 1,001,727 Long Term Liabilities at 1 April 90,122 89,815 91,229 90,482 89,767 89,032 88,275 87,494 86,686 85,847 Change in Long Term Liabilities (307) 1,414 (746) (716) (735) (757) (782) (808) (838) (871) Long Term Liabilities at 31 March 89,815 91,229 90,482 89,767 89,032 88,275 87,494 86,686 85,847 84,976 Gross Debt at 31 March 760,698 859,865 954,052 1,003,531 1,037,237 1,054,081 1,062,393 1,070,857 1,078,847 1,086,703 Capital Financing Requirement 792,123 891,290 985,477 1,034,956 1,068,662 1,085,506 1,093,818 1,102,282 1,110,272 1,118,128 Under / (Over) Borrowing 31,425 31,425 31,425 31,425 31,425 31,425 31,425 31,425 31,425 31,425 Table D - Ratio of Financing Costs to Net Revenue Stream General Services Forecast 2031/32 HRA Total Forecast 2023/24 Forecast 2024/25 Forecast 2025/26 Forecast 2026/27 Forecast 2027/28 Forecast 2028/29 Forecast 2029/30 Forecast 2030/31 Table E - Gross External Debt compared to the Underlying Need to Borrow (CFR) £000 Forecast 2023/24 Forecast 2024/25 Forecast 2031/32 Forecast 2025/26 Forecast 2026/27 Forecast 2032/33 Forecast 2032/33 Forecast 2027/28 Forecast 2028/29 Forecast 2029/30 Forecast 2030/31
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West Dunbartonshire Council Prudential and Treasury Indicators External Debt 737,971 845,500 949,927 1,005,141 1,043,025 1,062,386 1,072,389 1,082,589 1,092,299 1,101,900 Long Term Liability 98,797 100,352 99,531 98,744 97,936 97,103 96,243 95,354 94,432 93,474 Total 836,768 945,852 1,049,457 1,103,884 1,140,960 1,159,489 1,168,632 1,177,943 1,186,731 1,195,374 External Debt 805,059 922,364 1,036,284 1,096,517 1,137,845 1,158,967 1,169,879 1,181,006 1,191,599 1,202,073 Long Term Liability 107,778 109,475 108,579 107,720 106,839 105,930 104,993 104,023 103,017 101,971 Total 912,837 1,031,839 1,144,863 1,204,237 1,244,684 1,264,897 1,274,872 1,285,028 1,294,616 1,304,044 Bank Rate 5.25% 5.25% 4.75% 4.25% 3.75% 3.25% 3.00% 3.00% 3.00% 3.00% 3.00% 5yr PWLB Rate 4.50% 4.40% 4.30% 4.20% 4.10% 4.00% 3.80% 3.70% 3.60% 3.60% 3.50% 10yr PWLB Rate 4.70% 4.50% 4.40% 4.30% 4.20% 4.10% 4.00% 3.90% 3.80% 3.70% 3.70% 25yr PWLB Rate 5.20% 5.10% 4.90% 4.80% 6.40% 4.40% 4.30% 4.20% 4.20% 4.10% 4.10% 50yr PWLB Rate 5.00% 4.90% 4.70% 4.60% 4.40% 4.20% 4.10% 4.00% 4.00% 3.90% 3.90% Long term rating 1 year 2 years 3 years 4 years 5 years AAA 0.04% 0.09% 0.16% 0.25% 0.34% AA 0.02% 0.04% 0.09% 0.16% 0.22% A 0.05% 0.13% 0.24% 0.36% 0.50% BBB 0.14% 0.38% 0.65% 0.97% 1.29% BB 0.64% 1.85% 3.21% 4.50% 5.73% B 2.73% 6.63% 10.29% 13.41% 15.82% CCC 18.60% 26.52% 31.84% 34.95% 37.84% Note - The AAA default risk is actually higher than the AA default risk due the number of AAA rated institutions left Forecast 2032/33 Forecast 2032/33 Forecast 2027/28 Forecast 2028/29 Forecast 2029/30 Forecast 2030/31 Forecast 2031/32 Table F - Operational Boundary £000 Forecast 2023/24 Forecast 2024/25 Forecast 2025/26 Forecast 2026/27 Sep-26Jun-26 Table I - Historic Risk of Default Sep-24 Dec-24 Mar-25 Jun-25 Sep-25 Dec-25Link Asset Services Interest Rate View Mar-24 Jun-24 Mar-26 Table H - Interest Rate Forecast Table G - Authorised Limit £000 Forecast 2023/24 Forecast 2024/25 Forecast 2031/32 Forecast 2025/26 Forecast 2026/27 Forecast 2027/28 Forecast 2028/29 Forecast 2029/30 Forecast 2030/31
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West Dunbartonshire Council Prudential and Treasury Indicators Investment Fitch Category (or equivalent) Money Limit F1+ / AA- £10million F1 / A- £5 million 2 F1/A- £10 million (per group) 3 £5 million 4 £5 million 5 As in 1 above £10million and £5million Sector Limit £25 million Fund Limit £5 million 7 No limit Sector Limit £25 million Fund Limit £5 million £000 1% -1% Variable Rate Debt Payments N/A N/A N/A Variable Rate Investment income 53,000 530 -530 6 8 Table J - Counterparty Limits Time Limit 364 days 364 days Overnight 364 days Table K - Sensitivity to Interest Rate Movements 1 364 days Very liquid no time limit applies 6 months 364 days
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West Dunbartonshire Council Prudential and Treasury Indicators 2023/24 Upper Limits on fixed interest rates Limits on variable interest rates Lower Upper Lower Upper Lower Upper Under 12 months 0% 50% 0% 50% 0% 50% 12 months to 2 years 0% 50% 0% 50% 0% 50% 2 years to 5 years 0% 50% 0% 50% 0% 50% 5 years to 10 years 0% 50% 0% 50% 0% 50% 10 years to 20 years 0% 50% 0% 50% 0% 50% 20 years to 30 years 0% 50% 0% 50% 0% 50% 30 years to 40 years 0% 50% 0% 50% 0% 50% 40 years to 50 years 0% 100% 0% 100% 0% 100% 50 years to 60 years 0% 100% 0% 100% 0% 100% 60 years to 70 years 0% 100% 0% 100% 0% 100% Principal sums invested > 364 & 365 days 2024/25 2025/26 Upper Upper £nil £7m £nil £7m 100% 100% 100% 50% 50% 50% £7m£nil Table L- Treasury Management Limits on Activity Maturity Structure of fixed interest rate borrowing