Agenda item

Report for decision and submission to Council.

ORDERED that Executive approve that the following are forwarded to Council for approval as set out below:

a)    The Prudential Indicators and Limits for 2026/27 to 2029/30 relating to capital expenditure and treasury management activity set out in tables 1 to 9 of Appendix 1;

b)    The Treasury Management Strategy for 2026/27, which includes the Annual Investment Strategy for that financial year;

c)    The Minimum Revenue Provision (MRP) Policy for the 2026/27 financial year; and,

d)    An Authorised Limit for External Debt of £354 million for the 2026/27 financial year.

The Mayor noted that the agenda title and report title were not consistent however this did not affect the content of the report.

The Executive Member for Finance submitted a report for consideration by the Executive, presenting the Prudential Indicators for 2026/27 to 2029/30 and the Treasury Management Strategy for 2026/27. The report outlined the statutory requirement for the Council to set prudential indicators and approve an annual Treasury Management Strategy, which governs the Council’s borrowing, investments, and overall capital financing framework.

It was noted that the Prudential Indicators demonstrated the scale of the Council’s borrowing requirement, with the Capital Financing Requirement forecast to rise from £312.383 million in 2025/26 to £333.755 million in 2026/27, increasing further to £358.733 million by 2029/30.

The report explained that the Council had total external debt of £269.360 million as at 31 December 2025, with a further £20 million of borrowing expected before the end of the financial year, resulting in an estimated year‑end total of £289.360 million. This created an under‑borrowed position of £23.023 million, financed through internal cash balances. Members were informed that capital financing costs were expected to total £14.151 million in 2026/27, representing 7.1% of the net revenue budget.

Members also noted the Council’s approach to managing investment and borrowing risks, confirming that £24.917 million of cash balances were invested as of 31 December 2025, and that long‑term PWLB borrowing formed 89% of external debt.

The report further detailed the requirement to set an authorised limit for external debt, which was £331 million for 2025/26, rising to £354 million for 2026/27.

The Strategy also described the Council’s Minimum Revenue Provision policy, the knowledge and skills framework supporting treasury activity, and the external advice and benchmarking arrangements used to ensure the robustness, affordability and sustainability of the Council’s financial planning.

OPTIONS

It was a statutory requirement for the Council to approve the annual Treasury Management Strategy and set of Prudential Indicators. This report is a key step in achieving that objective. As a result, there are no alternatives available.

ORDERED that Executive approve that the following are forwarded to Council for approval as set out below:

a)    The Prudential Indicators and Limits for 2026/27 to 2029/30 relating to capital expenditure and treasury management activity set out in tables 1 to 9 of Appendix 1;

b)    The Treasury Management Strategy for 2026/27, which includes the Annual Investment Strategy for that financial year;

c)    The Minimum Revenue Provision (MRP) Policy for the 2026/27 financial year; and,

d)    An Authorised Limit for External Debt of £354 million for the 2026/27 financial year.

REASONS

The recommendations ensured that the Council are compliant with the Prudential Code for Capital Finance in Local Authorities and with the Ministry for Housing, Communities and Local Government (MHCLG) investment guidance. They also ensured compliance with the CIPFA Treasury Management Code of Practice and the requirements of Part 1 of the Local Government Act 2003. In addition, the recommendations establish a clear financial governance framework within which officers would operate when making borrowing and investment decisions and entering into material financial transactions.