Item 15 - Treasury Management Mid Year Report 2023-2024
West Dunbartonshire Council · 20 December 2023
Back to West Dunbartonshire Council — 20 December 2023 and its agenda
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West Dunbartonshire Council Report by the Chief Officer - Resources Council: 20 December 2023 Subject: Treasury Management Mid Year Report 2023/2024 1. Purpose 1.1 The purpose of this report is to provide Members with an update on treasury management to 30 September 2023. 1.2 The Audit Committee at its meeting on 13 December 2023 considered a report by the Chief Officer Resources (1) advising of the operation of the treasury function and its activities to 30 September 2023, and (2) requesting that the report be remitted to the West Dunbartonshire Council for approval. A copy of the report to the Audit Committee is attached as appendix 1. 2. Recommendations 2.1 Members are requested to: (a) Note the treasury management stewardship information within the appended report; (b) Approve the 2023/24 revised estimates of treasury and prudential indicators as advised within the appended report (Tables A, B, C, D, E, F, H, L and N); and (c) Note that the appended report was referred to the Audit Committee for further scrutiny on the 13 December 2023. 3. Background 3.1 In accordance with the Treasury Policy governing the Council’s treasury management activities during 2023/24, the Chief Officer - Resources is required to provide a mid year Report to Members regarding the Treasury function. 3.2 The mid year report covers the period 1 April 2023 to 30 September 2023 and details the current position (where appropriate) and revises the 2023/24 estimates where required. ITEM 15
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3.3 The Audit Committee is responsible for ensuring effective scrutiny of the treasury management strategy and policies and the report will be reported to a future meeting of that Committee for further scrutiny. 4. Main Issues Treasury Management Stewardship Report 4.1 A copy of the report is attached as Appendix 1. 4.2 The report provides details of key changes to the Council’s capital activity (the prudential indicators), the economic outlook, the actual and proposed treasury management activity (borrowing and investment) and the risk approach to treasury management (the treasury management indicators). 4.3 The external debt figures included within Table C includes both short term and long term debt due to a strategy of using short term borrowing to fund long term capital investment enabling the Council to take advantage of lower interest rates. 5. Option Appraisal 5.1 No option appraisal was required for this report. 6. People Implications 6.1 There are no personnel issues. 7. Financial and Procurement Implications 7.1 There are no direct financial or procurement implications arising from this report. 8. Risk Analysis 8.1 Although the appended report provides a mid year position in relation to treasury management there are three main risks associated with the formulation of prudential indicators and the treasury management strategy as detailed in Appendix 1. These risks are noted below; however the Council has robust monitoring processes in place and provides regular reports to Council and ensures further scrutiny by elected Members at the Audit Committee: (a) Capital receipts which affect the capital financing and borrowing requirement may not materialise and if this occurs then additional borrowing will be required in order to fund the financing requirement; (b) The risk of Counterparties default (i.e. loss of principal sum invested) must also be taken into account; however the Council has robust
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controls included within its treasury management and investment strategies that will assist in mitigating this risk; and (c) Capital inflation may increase capital expenditure levels, which in turn may affect the capital financing and borrowing requirement leading to an increase in borrowing, assuming no additional capital receipts are available. 9. Equalities Impact Assessment 9.1 No equalities impact assessment was required in relation to this report. 10. Environmental Sustainability 10.1 No assessment of environmental sustainability was required in relation to this report. 11. Consultation 11.1 The views of Legal Services have been requested on this report and have advised there are neither any issues nor concerns. 12. Strategic Assessment 12.1 Proper budgetary control and sound financial practice are cornerstones of good governance and support Council and officers to pursue the 5 strategic priorities of the Council’s Strategic Plan. 12.2 Treasury management contributes to the Financial Strategy via the interdependency that exists between pro-active treasury management and the formulation of long term financial plans. _______________________ Laurence Slavin Chief Officer – Resources Date: Person to Contact: Karen Shannon, Finance Business Partner Council Offices, Church Street, Dumbarton Email: Karen.Shannon@west-dunbarton.gov.uk
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Appendix: Appendix 1: Treasury Management Stewardship Mid Year Monitoring Report 2023/24 Treasury Management and Prudential Indicators 1 April 2023 to 30 September 2023 Background Papers: 1. Loans register and portfolio; 2. Debt rescheduling schedules; and 3. Prudential Indicators 2022/23 to 2032/33 and Treasury Management Strategy 2023/24 to 2032/33 (Council 29 March 2023) Wards Affected: No wards directly affected.