Purpose

The report considers the draft
treasury Management Strategy and Investment Strategy for 2025/26, prior to its
submission to the Council for approval.

 

Regulations require the Council to
prepare and formally approve both an annual Treasury Management Strategy and
Investment Strategy.  The latest document
updated for 2025/26 is attached as Appendix A to the report for consideration
by the Executive before being submitted to Council for approval.

 

In the past 12 months, the Council’s
investment balance has tanged between £18 million and £32 million, lower
levels are expected in the forthcoming year due to capital programme expenditure.  The Council expects to be a long-term
borrower and new treasury investments will therefore be made primarily to
manage day-to-day cash flows using short-term low risk instruments.  The existing portfolio of strategic pooled
funds will be maintained to diversify risk into different sectors and boost
investment income.

 

BORROWING levels are expected to
be £71.3 million at the end of 2025/26, compared to £72.3 million in the last
strategy.  The Council has previously
raised all of its long-term borrowing from the Public Works Loan Board (PWLB)
but will consider long-term loans from other sources.

 

The Ministry for Housing,
Communities and Local Government (MHCLG) has issued a consultation on the
extension of the statutory override on accounting for gains and losses on
pooled investment funds.  The outcome
is expected to be published in February 2025. 
Whether the override will be extended beyond 31 March 2025 is unknown.

 

The Council has set up a reserve
of £500,000 to mitigate the impact of the pooled funds statutory override
not being extended as unrealised losses on pooled investment funds are required
to be recognised in the General Fund. 
The actual impact will be based on the valuations of the Council’s long
term funds on 31 March 2026.

 

 

Decision

RESOLVED that the Executive:

 

(a)  endorses
the draft Treasury Management Strategy and Investment Strategy for 2025/26,
attached as Appendix A to the report; and

 

(b)  agrees
to submit the Strategy to Council for approval.