Issue - meetings

RECOMMENDED that Council approves the Treasury Management Strategy 2026/27 (Appendix 1)

This report sets out the monitoring of the Council’s Treasury Management function for the period 1 April 2025 to 31 December 2025. A surplus of £1.1m is being forecast for the 2025/26 financial year, partly due to the Councils ability to borrow lower than budgeted PWLB interest rates and partly due to increased interest receivable from investments.

This report also presents the Treasury Management Strategy for 2026/27 with the relevant detailed strategy included as appendix 1.

The Assistant Chief Financial Officer (CFO) presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'F' to these Minutes in the Minute Book.

The report provided an update on the Quarter Three position for 2025/26 in relation to treasury management activities. It included a summary of the current economic climate, an overview of the estimated performance of the treasury function, an update on the borrowing strategy (short and long term), investments and compliance with prudential indicators. The Quarter Three position forecast a surplus of £1.1 million for the 2025/26 financial year for the reasons given in the report. Table 6 in the report showed the Dedicated Schools Grant (DSG) deficit increase against the Council’s overall debt position and highlighted the need to review the reliance on short term borrowing to reduce the risk.

The report also included the Treasury Management Strategy for 2026/27 with the relevant detailed strategy included as Appendix 1. The Assistant CFO summarised the aims of the Strategy. The Strategy formed part of the report to be presented to the Budget Council on 24 February 2026.

The CFO and Assistant CFO responded to a number of questions in relation to the financing of the DSG deficit. It was noted that the Council could only borrow for capital purposes, not for day-to-day revenue expenditure. The Council’s capital financing requirements were set out in the Treasury Management Strategy. There was a lack of clarity from Government on the consequences of borrowing over the specified limit. It was noted that the Government was taking on responsibility for day-to-day operational costs of SEND high needs expenditure with effect from 1 April 2028. It was extremely frustrating that councils were still awaiting further detail on what exactly this responsibility entailed and when this detail would be announced, other than it being ‘later’ in the local government settlement process.

On the impact of local government reorganisation, the Assistant CFO advised that the Council’s borrowing arrangements with other councils and public bodies would transfer on the same terms if any changes occurred.

The Chair thanked officers for the revising the presentation of the report in response to feedback from members.

RESOLVED that the Audit & Governance Committee notes the reported activity of the Treasury Management function for the period ending 31 December 2025.

RECOMMENDED that Council approves the Treasury Management Strategy 2026/27 (Appendix 1)

Voting: Unanimous