Agenda item

Members gave consideration was given to a report of the Finance Manager (Capital and Treasury), which provided them with the annual treasury management review of activities and the actual prudential and treasury indicators for 2020/21. The Committee noted the report met the requirements of both the CIPFA Code of Practice on Treasury Management (the Code) and the CIPFA Prudential Code for Capital Finance in Local Authorities (the Prudential Code).

During 2020/21 the minimum reporting requirements were that the full Council should receive the following reports:

·         an annual treasury strategy in advance of the year (approved 26 February 2020)

·         a mid-year (minimum) treasury update report (approved 16 December 2020)

·         an annual review following the end of the year describing the activity compared to the strategy (this report)

The regulatory environment placed responsibility on Members for the review and scrutiny of treasury management policy and activities. The report was therefore important in that respect, as it provided details of the outturn position for treasury activities and highlighted compliance with the Council’s policies previously approved by members.

The Committee was charged with the scrutiny of treasury management activities in Oldham and was requested to review the content of the annual report prior to its consideration by Cabinet and Council (to ensure full compliance with the Code for 2020/21).

The key actual prudential and treasury indicators detailing the impact of capital expenditure activities during the year, with comparators, were set out in the report.

The Committee noted that actual capital expenditure was less than the revised budget estimate for 2020/21 presented within the 2020/21 Treasury Management Strategy report considered at the Council meeting of 4 March 2021. The outturn position was significantly less than the £147.632m original capital budget for 2020/21 as approved at Budget Council on 26 February 2020.

It had been apparent at the beginning of 2020/21 that spending plans were not going to be realised, the COVID-19 pandemic halted works on projects and delayed the start of others. Because of this, and taking account of re-profiled expenditure, new assumptions, approvals and scheme updates the expenditure budgets and funding plans were continually reassessed throughout in year. The significant re-phasing was associated with the revised vision and strategic framework for ‘Creating a Better Place’ which was approved in August 2020. This placed more emphasis on economic recovery, given the impact of the pandemic. This review required several existing regeneration projects to be examined and rephased to align to the long-term vision of the new strategy.

The final outturn position for 2020/21 of £73.227m was a significant reduction compared to the expenditure initially planned and approved at Budget Council in February 2020.

Short Term Temporary Borrowing was undertaken during the year and was detailed in the report.

Other prudential and treasury indicators were set out in the main body of the report.

The Director of Finance confirmed that the statutory borrowing limit (the authorised limit) was not breached during the financial year 2020/21.

The Committee noted that the financial year 2020/21 had continued the challenging investment environment of previous years, namely low investment returns. The Council constantly sought the best rate of return.

On being put to the votes, it was

RESOLVED that :-

1.    The actual 2020/21 prudential and treasury indicators presented in the report be approved.

2.    The annual treasury management report for 2020/21 be approved.

3.    The report be commended to the Cabinet.