Agenda item

The Executive Member for Financial Sustainability introduced the report which presented the Executive’s recommended Capital Strategy, the Minimum Revenue Provision Statement, and the Treasury Management Statement 2025/26, for approval by Full Council.

The Chair thanked the Executive Member for Financial Sustainability for his report.

Councillor Buckmaster asked if funds which were currently in property investments would be used to repay other council debts at the end of their terms.

The Executive Member for Financial Sustainability said that this was correct, with any receipts used to pay debts or fund capital requirements, such as waste vehicles. He said that the return dates for the funds were currently unknown, adding that the council had two property funds, both of which were being wound down.

The Interim Head of Strategic Finance said that exploratory work was being undertaken regarding the option for the council’s second fund to be absorbed by a larger fund. He said that if the fund was merged it was envisaged that most of the council’s initial investment could be returned by June/July, otherwise the winding down process could take two to three years. He confirmed that this would impact next year’s budget and in year cash flow/ cash flow requirement.

Mr Sharman asked if the asset disposal programme for 2026/27 was realistic and sought clarification of the effect of a fall in interest rates would have on the council’s budget.

The Executive Member for Financial Sustainability said that the asset disposal programme for 2026/27 was realistic, with the majority relating to Old River Lane. He said and that the council’s borrowing was more dependent on the gilt rate, which had remained steadily high and was not directly linked to the bank interest rate. He said that therefore a reduction in the gilt rate would help with the council’s (predominately short-term) borrowing costs. 

Councillor Nicholls asked for the implications of devolution on the council’s debt liability and long-term commitments.

The Interim Head of Strategic Finance said that when new bodies were merged or formed their assets and liabilities transferred with them, he cited Cornwall and Cumberland as such examples.

Councillor Deering referred to table 5 at paragraph 3.7.2 of the report. He noted the figures within the table and sought clarification that the figure of £800,000 in the third line did relate to asset disposals. He said that the report made vivid that there had been virtually no progress in relation to asset sales.

The Interim Head of Strategic Finance said that technically this figure may be an asset disposal, as it related to capital funding from a loan to Millstream. He said that the table itself concerned ‘capital receipts receivable’.

The Interim Head of Strategic Finance agreed that there had been virtually no asset sales completed within the year. He said that sales had been reforecast and that the council was confident that the programme for 2026/27 could be achieved. He said that the figure of 2.4 million shown table 5 would be in capital receipts, as loans and investments into Millstream are deemed as capital investments from an accounting perspective. 

It was moved by Councillor Nicholls and seconded by Councillor Swainston, that the recommendations, as detailed, be approved. It was noted that Councillor Jacobs abstained from the vote. After being put to the meeting and a vote taken, the motion was declared CARRIED.

RESOLVED – that (A) Members examine and comment on the Capital Strategy, Minimum Revenue Provision Statement and the Treasury Management Strategy 2025/26 including the Prudential Indicators contained within the reports.