Purpose

The CIPFA (Chartered Institute of Public Finance and Accountancy) Code of Practice for Treasury Management recommends that Members be updated on treasury management activities regularly (annual, mid-year and quarterly reports). This report therefore ensures this council is implementing best practice in accordance with the Code.

Decision

The Cabinet has considered a comprehensive review of the council’s treasury management activities and performance for Quarter 1 of the 2026/27 financial year that serves as a vital benchmark, aligning immediate quarterly performance with our broader year-to-date treasury strategy, and has agreed to:-

(1) Note the Quarter 1 Performance.

(2) Note the treasury management activities and performance for the quarter ended 30 June 2026.

(3) Note the Prudential Indicators.

Alternative options considered

The council’s treasury management function operates through a rigorous and continuous evaluation framework, designed to identify the most cost-effective and risk-adjusted approach to managing the authority’s financial resources. This process involves a systematic alignment of internal requirements, such as the cashflow demands of the Capital Programme, against a volatile external economic landscape characterised by shifting interest rate forecasts and inflationary pressures.

By meticulously weighing the trade-offs between fixed and variable interest rates, and assessing various maturity profiles, the council ensures that borrowing strategies are robust enough to mitigate refinancing risks while avoiding the premature commitment to expensive long-term debt. Simultaneously, every investment avenue is scrutinised under the strict hierarchy of Security, Liquidity, and Yield (SLY). This comprehensive appraisal allows the council to remain agile, strategically utilising ‘internal borrowing’ to reduce net interest costs while maintaining the requisite liquidity to meet operational obligations. Ultimately, this proactive and strategic framework ensures that all treasury decisions are aligned with statutory requirements and the long-term fiscal sustainability of the Borough.