Issue - meetings

The Executive Member for Financial Sustainability presented the Treasury Management Mid?Year Review. The report outlined the external economic context, including the rise in the 10?year gilt rate from 4.65% to 4.7%, which was a key determinant of the Council’s borrowing costs.

The Council’s external borrowing had reduced from £64.5 million to £61.5 million over the period, while investments had fallen from £34.1 million to £29.4 million, resulting in a net increase in borrowing of £1.7 million due to ongoing capital programme requirements. It was reported that most borrowing remained short?term, reflecting the Council’s intention to refinance at lower rates when possible. Inflation was forecast to fall, and interest rates were expected to decline accordingly. Since the report had been produced, the gilt rate had fallen slightly and the base rate had been reduced to 3.75%.

The report confirmed that the Council continued to comply with the CIPFA Treasury Management Code through the monitoring of prudential indicators.

Councillor Brittain, the Executive Member for Financial Sustainability proposed that the recommendations in the report be supported. Councillor Dumont seconded the proposal.

Members thanked the Executive Member for the report and confirmed they had no objections to it. Members noted that the previous optimism around interest rates falling was now unlikely to be realised. Members noted the wider economic challenges and highlighted the potential for higher inflation and the possible impact on gilt rates and future interest rate decisions.

The motion to support the recommendation, having been proposed and seconded, was put to the meeting and upon a vote being taken, was declared CARRIED.

RESOLVED – that (A) Council approved the Mid-Year Treasury Management Review and Prudential Indicators for 2025/26.

The Leader of the Council presented the report on behalf of the Executive Member for Financial Sustainability. Members heard that the mid?year Treasury Management Review for 2025/26 reported a slight rise in the 10?year gilt rate, influencing borrowing costs. External borrowing reduced to £61.5m, whilst investments fell to £29.4m, increasing net borrowing by £1.7m due to capital programme demands. Most borrowing remained short?term in anticipation of future refinancing at lower rates. Since the report was drafted, gilt and base rates had begun to ease. It was noted that the Council completed its withdrawal from the Hermes property fund, reducing property investments to £2.6m.

The Leader of the Council proposed the recommendations as set out in the report. The Executive Member for Environmental Sustainability seconded the proposal.

In response to a Member question in relation to whether there was a clear point at which the Council should stop relying on short?term loans, or whether it was safe to continue monitoring the market and wait for conditions to improve, officers advised that rates were monitored daily. It was noted that the Council held two £25?million Public Works Loan Board (PWLB) loans due for repayment in June and September 2026 and that Officers were working with treasury advisers to determine the best refinancing options and timing.

The motion to support the recommendation, having been proposed and seconded, was put to the meeting and upon a vote being taken, was declared CARRIED.

RESOLVED – that (A) Members examined and commented on the Mid-Year Treasury Management Review and Prudential Indicators for 2025/26 and recommended its approval to Council.

The Director for Finance, Performance and Risk introduced the report, the mid-year review against the Treasury Strategy which was agreed by Council as part of the Budget papers in February/March 2025.

The Chair thanked the Director for Finance, Performance and Risk for the report.

There were no comments or questions from the Committee.

It was moved by Councillor Deering and seconded by Councillor Nicholls that that the recommendations, as detailed, be approved.

After being put to the meeting and a vote taken, this motion was declared CARRIED.

RESOLVED – that Members examine and comment on the Mid-Year Treasury Management Review and Prudential Indicators for 2025/26.