To consider the report.

Andrew Vallance said that the main point to highlight from the report was that it complied with the CIPFA code limits and targets. The main treasury management activity both in the last financial year and the current financial year was to protect the council against the risk of increased short term interest rates. A long term loan of £15 million had been taken out last year, the council had traditionally used short term borrowing. The idea of this was to lock in lower interest rates as it was anticipated that interest rates would rise.

Councillor Bond mentioned the treasury management report from the last financial year and the changes that had been made, he asked if there was anything this year that the Committee should be aware of.

Andrew Vallance said that the main changes were around the Minimum Revenue Provision (MRP) and the tightening up of commercial investments.

Adele Taylor said that officers ensured that the council was compliant, strategies were kept up to date and the Committee was able to consider the capital strategy and the treasury management strategy. CIPFA had reviewed the council’s MRP provision a few years ago, this was due to be looked at again in the current financial year to ensure that RBWM was still compliant.

Councillor Sharpe said that there was currently £206 million borrowing at the end of March 2022. He asked if this was expected to increase.

Andrew Vallance confirmed that it was likely to increase over the Medium Term Financial Plan before coming back down.

Adele Taylor added that there was often a perception that debt and borrowing were a bad thing, it meant that the council was doing something with the money. A lot of the grants received from the government during Covid had been paid up front which had helped with the cash flow. It was important that officers were managing the money that came in and the money that came out of the council over the course of the year. RBWM had inherited debt from the previous Berkshire authority which was the same for all current Berkshire local authorities. The council also used their financial advisors, Arlingclose, where appropriate, as they were able to help with estimating things like interest rates.

The Chairman said that the investments in properties had generated £3.1 million of investment income for the council, which represented a rate of return of 3.4%. She asked if this was a reasonable return.

Andrew Vallance responded that based on his experience elsewhere it was indeed a reasonable return.

Councillor Hilton said that the asset management side of the Property Company were doing work on the small retail units which would generate increased revenue. He thanked the Head of Finance for the report which was clear and easy to read.

The Chairman agreed with the comments made by Councillor Hilton on the report, it was concise and exactly what the Committee needed to see. She thanked the finance team for the work preparing the report.

RESOLVED UNANIMOUSLY: That the Audit and Governance Committee noted and approved the annual Treasury Outturn Report 2021/22.