Damian White, Leader of Council, made Martin Goode chair of this committee as a reward. Martin’s four meetings in 2019 lasted three hours 50 minutes, so he isn’t a workaholic.* The Audit Committee is a rubber stamping operation despite its importance.
The 5th September 2019 meeting had a very important report: ‘Annual Treasury Management Report 2018/19’**. It was the centrepiece of the meeting. The report was so complex a glossary was included. The table below is a summary of the outcome for 2018-9 there seems to be an explanatory column missing.
Martin’s meeting lasted 80 minutes. If he’d allocated more time he might have queried the ‘missing’ column. The column I think was missing showed how much interest was paid for borrowing and the amount of income received from investments. Let me explain.
Assuming the quoted interest rate is AER*** then:
(1) Borrowings of £240.486M at 3.59% costs Havering £8.633M annually
(2) Investment income on £210.234M at 1.07% earns Havering £2.446M annually
(3) Therefore Roger Ramsey’s borrowing/investment policy loses £6.187M for the people of Havering.
Roger’s policy doesn’t look good unless there’s a technical explanation. Do either Martin or Roger know the cost of retiring debt to take advantage of historically low interest rates? ****
The Treasury Report was one of two major agenda items in Martin’s perfunctory 80 minute meeting. Havering deserves a better, more critically aware Audit Committee than this.
* £7650: Four meetings 30th January- 23rd October 2019 at £2,000 an hour.
*** AER means Annual Equivalent Rate
**** loc.cit see especially para 6:1 and 6:2