Issue - meetings

Report to note.

The Executive Member for Finance submitted a report which provided an update on the mid-year Prudential Indicator results for 2025/26, outlining the Council’s position in relation to capital finance activities, overall indebtedness, and the performance of the treasury management function against the approved strategy for the current financial year.

The report set out the mid-year performance for 2025/26 against the annual Treasury Management Strategy approved by Council and provided an analysis of results to date. Treasury management activity had remained compliant with approved prudential indicators during the first six months. Borrowing for the year was expected to be £18.735m compared to the approved budget of £17.085m, due to a £1.600m loan to Middlesbrough College and other capital programme movements. The Capital Financing Requirement was forecast at £314.380m by 31 March 2026, with external debt expected to rise from £254.605m to £284.605m, leaving the Council under-borrowed by £29.775m (9.5%), which was considered good practice. All cash investments had been made in line with creditworthiness criteria, generating an estimated £0.900m in interest for 2025/26. The net annual revenue cost of financing debt was £12.205m, or 8.5% of the net revenue budget, within the affordability limit of 10%. Long-term forecasts indicated costs approaching 10% by the end of the decade, limiting future borrowing capacity and increasing reliance on external funding, capital receipts, or projects that reduce operating costs or increase income.

The Deputy Mayor expressed her thanks to the Executive Member for Finance and to the Finance Department as the report was very technical.

OPTIONS

No other options were submitted as part of the report.

AGREED that Executive:

1. Note the annual Treasury Management Strategy, the mid-year Prudential Indicator results for 2025/26 as the Council’s current position in relation to capital finance activities and overall indebtedness.
2. Note the performance of the treasury management function against the Council’s approved strategy for the current financial year.

REASONS

The recommendations would fulfil the following for the local authority:

·         Compliance with the CIPFA Prudential Code for Capital Finance for local authorities.

·         Compliance with the CIPFA Treasury Management Code for local authorities.

·         Compliance with the Local Government Act 2003 Section 1 in relation to borrowing.