Decision Maker: Executive

Outcome: Recommendations Approved

Is Key Decision?: No

Is Callable In?: Yes

Date of Decision: February 3, 2025

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.    

Content: 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.