Agenda item

To consider the report.

The report set out the Treasury Management Strategy (TMS) and Capital Receipts Flexibility and Efficiency Strategy for Somerset Council for 2025/26.  It also included a Minimum Revenue Provision (MRP) Policy for 2024/25 and 2025/26.

The report recommended that Audit Committee review the documents and consider any comments and feedback to the Executive ahead of consideration by the Executive and recommended to Council at its Budget Setting meeting:

1.1     Treasury Management Strategy for 2025/26, including the prudential Treasury Indicators set out in Appendix A of the report;

1.2     MRP Policy for 2024/25 and 2025/26 as set out in Appendix B of the report;

1.3     Flexible Use of Capital Receipts Policy for 2025/26 as set out in Appendix C of the report.

The report stated that the Council’s current investment portfolio comprised of:

•         short-term, cash-based investments,

•         a Strategic Pooled Funds Portfolio with a current book cost of £112.25m,

•         non-treasury investments comprising commercial property and shareholdings in Council-owned companies

As of 31 December 2024, the Council held just over £709m of debt as part of the strategy for funding previous years’ capital programmes. The Council’s investment balance stood at just over £218.0m, made up of £105.8m cash and £112.25m of pooled funds.

The Service Director Finance and Procurement,  Nicola Hix presented the item, highlighting that it comprised of 3 key reports for the budget setting. It would then be presented to the Executive before being considered by Full Council. She acknowledged that it was quite a complex read and that it was hoped to make it easier to read with the use of tables and visual aids.

She continued that the main objective of the Treasury Management Strategy was to safeguard public money. The MRP Policy covered 2 years -  2024/25 and 2025/26 and a lot of progress had been made in developing the policy inherited from the districts. The Capital Receipts Strategy concerned the Government allowing the use of capital receipts for the transformation activity, which is not usually permitted.

In response to a questions, the Chief Finance Officer, Maria G. Christofi advised that the Finance team were constantly checking with financial advisors that the advice given was current and correct and that they worked closely with the Treasury Management team to decide what rates would be acceptable. She added that there was scope to borrow within the capital program. The TM Strategy was a forward-looking document so there were no comparisons to previous years provided. Also, that inflation rates are tracked and monitored closely.

As there were no additional recommendations, Councillor Simon Coles proposed the recommendations within the report to review and consider the report, which was seconded by Councillor Andy Sully. All approved with one abstention.

RESOLVED

The Audit Committee agreed to note the report, having given it due consideration.

Before moving onto the next confidential items on the agenda, the Chair asked the Interim Head of Governance and Democratic Services Scott Wooldridge, to explain to the Committee and those watching online, the reasons why the meeting was to now go into closed session. He explained that legislation allows meetings to move into private session when there is exempt information that may be discussed. He gave details on the categories of exempt information and confirmed which category applied in this case.

Exclusion of Press and Public

Having been duly proposed and seconded under Schedule 12A of the Local Government Act 1972 the Audit Committee resolved to exclude the press and public from the meeting.  This was on the basis that if they were present during the business to be transacted there would be a likelihood of disclosure of exempt information, within the meaning of Schedule 12A to the Local Government Act 1972:

Reason: Information relating to the financial or business affairs of any particular person (including the authority holding that information).

RESOLVED

It was proposed by Councillor Mike Hewitson and seconded by Councillor Simon Coles to pass this resolution. All approved, with one abstention.