Issue - meetings

To consider the report of the Head of Finance.

The Head of Finance introduced the report, informing the committee that that this was the third report for the 2019/20 financial year. It was explained to the committee that at the start of the year treasury management had been insourced from Capita and responsibility had been brought in-house. The officer explained that at the start of the year the limits were changed due to the government’s Covid-19 grants funding which was then distributed to businesses within the districts. Additionally, the officer explained that in terms of treasury performance, the Vale of White Horse had achieved an income above the budget. However, South Oxfordshire District Council had achieved an income below the budget, although it was noted that this was due to South Oxfordshire containing a large number of maturities which had been early in the financial year, which had been after the interest rates had become significantly lower. The Head of Finance also explained that in relation to the benchmarks which were measuring performance against other organisations, all benchmarks had been exceeded except one. This had been for South Oxfordshire District Council which had been below the benchmark for unit trust performance. It was also clarified that neither council had undertaken any borrowing in the financial year.

A comment was made that it would be helpful to see the expenditure from investments within the report. As there had been £180 million in investments, the committee requested that the expenditure throughout the year should be shown in order for the committee to see where payments were going. The officer responded to this request by explaining that for South Oxfordshire, investment income was used in the year after it was earned, so any income earned this year would fund next year’s budget which was agreed at Cabinet and Council in February. The officer also confirmed that they would provide greater detail on expenditure in future reports.

In response to an additional question regarding the interest rates, the officer explained that the low income being generated was due to a significantly lower interest rate than in previous years, due to the global economic downturn during the Covid-19 pandemic. As a result, alternative ways would need to be analysed to achieve better returns.

A motion moved and seconded, to support the officer’s recommendations was declared carried on being put to the vote.

RESOLVED: to note the treasury management outturn report 2020/1 and confirm satisfaction that the treasury activities are carried out in accordance with thetreasury management strategy and policy.