Issue - meetings

Report of the Cabinet Member Finance

Councillor Rawson, Cabinet Member finance introduced the report which fulfilled two purposes; i.e. to demonstrate performance over the last six months and that the council is operating within the agreed parameters.  He advised that before the downturn the council’s treasury management played an important part in the council’s finances with investment income of around £0.75m, but with the downturn in the global economy the investment income is now very modest.  However it is still important that the Council is satisfied as to the way in which its investments and loans are being managed, and he was pleased to report that over the last six months the council has managed its cash flow in such a way that short term borrowing has been reduced.  The level of investment income was higher than predicted, due to favourable interest rates.  He pointed out that long term borrowing had increased due to the loan which had been taken out on behalf of the airport.  He referred Members to section 4.4 to 4.7 of the report which set out the position in relation to the Icelandic banks.

He concluded that the council was operating within its prudential borrowing guidelines and thanked the officers, particularly Andrew Sherbourne for his work on treasury management.  He also thanked the chair of treasury management panel, Councillor Tim Harman, and its members for their monitoring work.

There being no comments or questions the Mayor moved to the vote

RESOLVED THAT the contents of the summary report of the treasury management activity during the first six months of 2013/14 be noted.

Report of the Cabinet Member Finance

RESOLVED THAT

Council be recommended to note the contents of the summary report of the treasury management activity during the first six months of 2013/14.

The Cabinet Member Finance introduced the report which ensured that the authority had adopted the CIPFA Code of Practice on Treasury Management 2009 and complied with its requirements.

He highlighted the fact that due to the efficient management of cash flow there had been a reduction in short term borrowing from £2 million to £20 000. There had also been an increase in the amount of short term lending which meant that borrowing costs for 2013/14 were forecast to come under by approximately £6 000 against budget. The Cabinet Member also reported that officers had been effective in securing advantageous interest rates of 0.29 % on borrowings and 0.64 % on investments. He paid tribute to the finance team for the excellent job they had done in managing the Council’s investments and borrowings in the interests of the Council tax payer.

The Cabinet Member reported that long term borrowing had increased. In May 2013 a loan of £1.2 m was taken out with the PWLB for ten years at a rate of 1.80 % on behalf of Gloucestershire Airport Ltd. This loan was cost neutral for the Council as the Airport were repaying the Council in line with the repayment schedule.

The Cabinet Member concluded by saying that this was a satisfactory report in the light of the continuing difficult economic circumstances.

RESOLVED THAT

Council be recommended to note the contents of the summary report of the treasury management activity during the first six months of 2013/14.