Agenda item

Treasury Management Reports

(Copy herewithin)


At the Chair’s Invitation, the Corporate Accountant presented the report and explained that the report had been developed in consultation with the Council’s external investment manager and treasury adviser, Link Asset Services (LAS) andprovided an update for the year ending 31st March 2020. The Corporate Accountant summarised the Outturn report for 2019/20 and explained that it reflected the economic impact of the Covid-19 pandemic. However, despite this the treasury management investments reported a return of 1.28% for the year which was 0.65% better than the 3 month London Interbank Bid Rate (LIBID) benchmark. It was also noted that Northampton Borough Council’s returns were boosted significantly from its investment of £8m into the CCLA Property Fund which achieved a stable return during the year.


In terms of the mid-year update for 2020/21, the update demonstrated the impact of the Covid-19 pandemic to date, with a detailed briefing note at appendix 2 which summarised the following key issues:

The Bank rates unchanged at 0.10% since March 2020.

The level of quantitative easing unchanged at £745bn.

A revision of the forecast falls in GDP in the first half of 2020 from 28%

to 23% (subsequently revised to -21.8%).

A revised down forecast peak in the unemployment rate from 9% in Q2

to 7½% by Q4 2020.

A forecast that there would be excess demand in the economy by Q3

2022 causing CPI inflation to rise above the 2% target in Q3 2022, (based

on market interest rate expectations for a further loosening in policy).


The Chief Finance Officer added that the Council had a treasury management team, external advisors and a finance business partner team which worked exceptionally hard. The Covid-19 pandemic had severely impacted income stream, yet the Council managed its cash flow. Northampton Borough Council, like other local authorities, had been instructed by the government to distribute business (BEIS) grants to provide economic support as part of the coronavirus pandemic, which meant that large sums of monies were being handled. The Chief Finance Officer concluded that it had been a challenging and difficult year and thanked the teams for their hard work.


The Chair thanked the Corporate Accountant, and everyone involved on behalf of the Audit Committee for their hard work and excellent treasury management.


Members asked if the 2020/21 management strategy and outturn reports would be carried over to the Unitary. The Corporate Accountant confirmed that to her knowledge this would be the case.


Members also asked for the return on the Council’s CCLA investments and if the Council was considering loan restructuring. The Chief Finance Officer responded the return was at 4.5% and that the Council was actively looking at rates, particularly those relating to HRA.


Members noted the third party loans detailed in table 3 of the report and questioned if these loan repayments had been affected by the Covid-19 pandemic. The Chief Finance Officer explained that the Council was understanding and offered support to the University of Northampton and the Northampton Town Rugby Football Club. The Council had deferred the capital payments to support the Northampton Town Rugby Football Club, so currently only the interest payments were being paid and a report would be brought to the next Cabinet meeting detailing a loan extension of £8.8m.


RESOLVED: That the Audit Committee reviewed and noted the attached Treasury Management Performance Reports.






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