Issue - meetings

To provide pre-decision scrutiny to the strategy being proposed (report of the Deputy Chief Executive – Corporate Development (S151) enclosed).

Consideration was given to the report of the Deputy Chief Executive – Corporate Development (S151) which provided pre-decision scrutiny to the strategy being proposed.

The Interim Treasury Manager (PSPS) introduced the report which outlined the following main points:

• Background to the item;
• That the Treasury Management Policy Statement at Appendix 1 did not propose any changes for 2025/26;
• That the Draft Treasury Management Strategy Statement, Minimum Revenue Provision Policy Statement and Annual Investment Plan 2025/26 at Appendix 2 included the following areas:
  • Reporting requirements;
  • Capital prudential indicators 2025/26 to 2029/30;
  • Borrowing requirement;
  • MRP policy statement;
  • Prudential and treasury indicators;
  • Treasury limits;
  • Prospects for interest rates;
  • Borrowing strategy;
  • Annual investment strategy;
  • Creditworthiness policy;
  • Country limits; and
  • Investment strategy.

Members considered the report and made the following comments:

• Members referred to the council’s Capital Financing Requirement (CFR) table at point 2.2 of Appendix 2 and queried the significant projected differential to ‘movement in CFR’ from £10.9 million in 2026/27 to £734,000 in 2028/29.
  • The Interim Treasury Manager (PSPS) responded that the figures related to the capital programme, the finances for which were outlined at scheme level within the budget report.

• Members also queried the increase in the Housing Revenue Account (HRA) CFR.
  • The Deputy Chief Executive – Corporate Development (S151) responded that:
    • The HRA was currently under-borrowed;
    • Borrowing had not previously been required due the HRA’s significant reserves however the identification of the need for HRA borrowing had been included within the HRA revenue implications since 2023/2024;
    • Further borrowing would be dependent on the HRA Business Plan evidencing affordability;
    • Initial short-term borrowing would be extended over a longer term when interest rates reduced; and
    • The new Section 151 officer would be briefed on the council’s current position regarding this matter.

• Members noted that the ‘core funds and expected investment balances’ at point 2.4 of Appendix 2 should be in units of £’000s.

AGREED:

That the comments of the Governance and Audit Committee in respect of the Treasury Management Policy (Appendix 1) and the Treasury Management Strategy Statement, Minimum Revenue Provision Policy and Annual Investment Strategy 2025/26 (Appendix 2) be noted by Cabinet on 18 February 2025, and by Council on 27 February 2025, when the documents are to be considered as part of the budget report.