VWHDC detailed treasury performance in 2022/23

Council treasury investments as at 31 March 2022


1.    The council’s treasury investments analysed by age as at 31 March 2023

 were as follows:




2.    The majority of the funds invested were held in the form of fixed interest rate and term cash deposits. These provide some certainty over the investment return. 

3.    The investment profile is organised to ensure sufficient liquidity for revenue and capital activities, security of investments and to manage risks within all treasury management activities.

4.    The chart below shows in percentage terms how the portfolio above is spread across investment types:


Treasury investment income

5.    The total interest earned on treasury investments during 2022/23 was £2.6 million compared to the original budget estimate of £0.49 million as shown in table 2 below:



6.    The actual rate of return achieved was £2.1 million higher than the original budget. This was primarily due to higher than forecast interest rates throughout the year, as a result of the Bank of England increasing rates at each Monetary Policy Committee meeting.

7.    The actual average rate of return on internally managed treasury deposits for the year was 1.54 per cent.


Performance measurement

8.    A list of treasury investments as at 31 March 2023 is shown in appendix E. All investments were with approved counterparties. The average level of investments held was £172 million.  Table 3 below shows in summary the performance of the council’s treasury investments against the benchmarks set out in the Treasury Management Strategy. These benchmarks are used to assess and monitor the council’s treasury investment performance for each type of investment.

9.    The £172 million does not represent the council’s usable cash backed reserves, which at 31 March 2023 totalled £50 million including capital grants received in advance of spend.  The difference represents the council’s working capital balance and timing of cashflows.


10. Daily cashflow balances are managed in-house with the portfolio of fixed-term deposits, call accounts and money market fund balances benchmarked against the three-month SONIA rate, which was an average of 2.72 per cent for 2022/23.  The performance for the year of 1.54 per cent was below the benchmark by 1.18 per cent as existing deposits prior to the unexpected pace of the rise in market rates brought down the average portfolio returns.   

11. The CCLA property fund initial principal investment of £2 million (April 2013) increased in value to £3 million prior to the start of the year but, fell back to £2.54 million at 31 March 2023.  Dividends received in the year totalled £0.11 million. Both the capital appreciation and the interest earned are included in the performance of -13.27 per cent achieved above.  The capital loss is however not realised and so for comparison purposes, the actual rate of return of income received during the year is 3.8 per cent.

Land and Property

12.The council holds a portfolio of investment properties, which includes land, offices and shops that are let on a commercial basis.  These assets are valued on an annual basis and had an average net book value of £5.1 million during 2022/23 (£5.1 million as at 31 March 2022).  Income generated was £0.24 million (£0.23 million in 2021/22).  This is equivalent to a gross return of 4.68 per cent.

13.Due to movement in property values and the exclusion of whole life costs, these rates of return should not be taken as a direct comparison with other classes of investment.

Liquidity and yield


14. The council uses short-term investments to meet daily cash-flow requirements and also aims to invest a proportion of the portfolio in longer-term instruments where possible. 


15. The average daily balance held in short-term notice accounts during 2022-23 was £27.7 million.