Consideration was given to the report of the Chief Finance Officer on the mid-year Treasury Management review.  The report provided an update on several financial areas as follows:

•     Financial Investments: Total investments were predicted to yield approximately £600,000 in 2022/23, which was £250,000 higher than the budget.

•     Borrowing: Total borrowing as at 30 September 2022 was £32.152m; well below the forecast of £85.857m.

•     Treasury and Prudential Indicators: Levels were within limit and would be reviewed as part of the 2023/24 Treasury Management Strategy.  The ratio of net financing costs to the net revenue stream was identified at Appendix C; the current forecast was lower than the original due to the underspend on borrowing costs and additional investment income.

•     Non-Treasury Investments: Performance was predicted to exceed the 2% target / 2022/23 budget in respect of properties purchased through the Property Investment Strategy.

The IFRS9 statutory override allowed councils to disregard changes in the value of their pooled investments and protect taxpayers from market volatility.  The Council had two such investments (CCLA and Hermes) originally invested at £8m.  The override expired on 31 March 2023 and the Government had consulted on options, the outcome of which was not currently known.  If the override was discontinued, any change in values would have to be reflected in the General Fund.  This would impact on the Council’s usable reserves.  As at 31 August 2022, the Council’s investments valued £9.104m, which was £1.104m more than the original investment.

The economic outlook remained uncertain and difficult to predict.  Inflation was still high and interest rates had risen significantly.

Cabinet noted that investment activities conformed with the approved strategies and the Council had no liquidity difficulties.

RESOLVED: That the report be noted.