To note and approve the Treasury Management Update.

Andrew Vallance, Head of Finance, explained that the Treasury Management Policy had been approved as part of the Budget at the beginning of the year and this was a mid-year update on the strategy. A report would be provided at the end of the year on performance across the year. RBWM had complied with its treasury strategy and had so far not compromised any of its boundaries or limits. Investment returns had beaten the bench marker target that had been set. RBWM would continue to borrow short term, with interest rates being kept low by the pandemic.

Councillor Bond said that he had noted that there was an early repayment penalty for loans and asked if this would be replaced by long or short term loans. He had looked at other local authorities and discovered that RBWM was borrowing a similar amount but that there was a lower useable reserves than other authorities. Councillor Bond understood that there was a limit of 80% on variable rate borrowing and wanted to understand where did the short term borrowing limit come from and if it could be changed. He also asked a couple of questions on the Counterparty Lending List. Did the list come from Arlingtonclose or was it something that RBWM managed and how did the process work with the list, was it something that went through Cabinet or Full Council?

Andrew Vallance said that there was a variable limit of less than 100% due to the risks involved, there would not be a 100% limit on variable debt. The recommendations came from Arlingtonclose, they used credit rating agencies to determine the ratings which RBWM then used. The list did not go to Cabinet as it was mid-year, but the strategy and counter party list would be going to Cabinet for consideration as part of the Budget early next year.

Councillor Bond said that the counter party list from last year included building societies but did not so now, Andrew Vallance said that he would have a look at the reason for this.

Councillor Story commented that the levels of debt were significant and asked how this compared to other local authorities nationally. He asked if there was any opportunity for the debt to be repaid.

Andrew Vallance said that the long term debt was from Berkshire County Council days so was something that had been an issue for RBWM and other Berkshire authorities for a number of years. There were a number of other authorities that were in a worse position. RBWM did not change the level of debt as the premium to do so would be high, but there were plans to pay off the short term debt in the medium term.

Councillor L Jones said that things were fast moving and asked if the strategy would be updated. Andrew Vallance explained that an updated strategy would be coming to Cabinet in February 2021 which would include an updated review from Arlingtonclose. The positon of RBWM in the report was as of 30^th September 2020.

Councillor Hilton, Lead Member for Finance and Ascot, noted that in the report it was stated that by paying pension contributions early RBWM was saving £108,000, but in Financial Monitoring papers this year the figure was £160,000. Andrew Vallance said that this figure would be checked and corrected where appropriate.

A named vote was taken on the recommendation listed in the report.

RESOLVED UNANIMOUSLY; That the Audit and Governance Committee noted and approved the mid-year Treasury Management Update Report 2020/21.