Issue - meetings

To consider the report of the Strategic Director for Corporate Resources.

Agreed:

RECOMMENDED that Council approve the adoption of the Treasury Management Strategy and Treasury Management Practices and the delegations contained therein.

Reason for Decision: As set out in the report.

The Executive received the report on the Treasury Management Strategy for 2026/27, which included the Annual Investment Strategy and updated Treasury Management Practices. The report advised that, in line with CIPFA and MHCLG guidance, the Council was required to approve a strategy for managing its financial investments each year. It further highlighted the need to manage risks associated with borrowing and investments, including potential losses and the impact of changing interest rates.

Particular reference was made to:

• there was a statutory requirement for annual Council approval and there were no significant changes from the previous year; and
• there was still a big disconnect between the base rates and the amount that local authorities were able to borrow, making borrowing for the capital programme still very expensive.

During the discussion, Executive Members raised the following points and

Questions:

• that was the specific difference between borrowing rates and the base rate, and whether there was any projection on when they might realign;
• it was enquired about the plan for a £10 million debt maturing on 12 March 2026, which had a 4.87% rate, and how this would be refinanced; and
• the net interest payable on the council's total debt, was calculated to be well under 1% (approx. 0.7-0.8%).

In response to questions raised by Executive Members, the Strategic Director for Corporate Resources advised that:

• the £10 million debt was part of a short-term borrowing policy used as a cash flow management tool due to high PWLB (Public Works Loan Board) rates;
• it would likely be refinanced, but the decision depended on the Council's cash position at the time;
• a reduction in cash was expected by March 2026 as council tax and business rates were collected over 10 months;
• interest rates for local authority borrowing was significantly higher than the base rate;
• the PWLB 50-year loan for the HRA was 5.8%, the PWLB loan for General Fund was 6.02% and the Bank of England Base Rate was 3.75%; and
• the future of PWLB rates depended on the market's view of government borrowing rather than on the Bank of England's base rate.

The Leader moved the recommendations, which were seconded by Councillor

Wright, voted upon, and CARRIED unanimously.

RECOMMENDED that Council approve the adoption of the Treasury Management Strategy and Treasury Management Practices and the delegations contained therein.

To consider the report of the Strategic Director for Corporate Resources.

The Leader moved the recommendations of the report, seconded by Councillor Wood, and invited the Head of Service – Finance to present the report.

The Head of Service – Finance presented the report, making the following points:

• the base rate was steadily reducing; and
• the Council were avoiding borrowing where possible using cash balances.

During debate Councillor Moore was interested to hear the Leader’s opinion and understand the cautious approach to borrowing. She was concerned that this could put the Council at risk in the short to medium term.

The Leader felt that it was responsible to not borrow and clarified the reasons why.

Following a vote, the recommendations were unanimously CARRIED.