Item 21 - Treasury Management Mid-Year Report 2022-23
West Dunbartonshire Council · 26 October 2022
Back to West Dunbartonshire Council — 26 October 2022 and its agenda
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West Dunbartonshire Council Report by the Chief Officer - Resources Council: 26 October 2022 Subject: Treasury Management Mid Year Report 2022/2023 1. Purpose 1.1 The purpose of this report is to provide Members with an update on treasury management to 31 August 2022. 2. Recommendations 2.1 Members are requested to: (a) Note the treasury management stewardship information within the appended report; (b) Approve the 2022/23 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) Agree that the appended report is remitted to the Audit Committee to ensure further scrutiny takes place. 3. Background 3.1 In accordance with the Treasury Policy governing the Council’s treasury management activities during 2022/23, 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 2022 to 31 August 2022 and details the current position (where appropriate) and revises the 2022/23 estimates where required. 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. Item 21
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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 revised estimate for gross capital expenditure during 2022/23 (Table A) has increased by £21.458m from the original estimate due to revision to the ongoing forecast outturn figures for both the General Services capital plan and the HRA capital plan which are regularly reported to Members (mainly additional slippage carried forward from 2021/22 following the year-end; additional spend linked to an increase in grant income now anticipated; and slippage in spend projected for 2022/23). 4.4 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: 1 October 2022 Person to Contact: Jackie Nicol-Thomson, Finance Business Partner Council Offices, Church Street, Dumbarton Email: Jackie. NicolTomson@west-dunbarton.gov.uk Appendix: Appendix 1: Mid Year Monitoring Report 2022/23 Treasury Management and Prudential Indicators 1 April 2022 to 30 September 2022
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Background Papers: 1. Loans register and portfolio; 2. Debt rescheduling schedules; and 3. Prudential Indicators 2021/22 to 2031/32 and Treasury Management Strategy 2022/23 to 2031/32 (Council 23 March 2022) Wards Affected: No wards directly affected.