Issue - meetings

Report from the Executive Director of Corporate Services.

Recommendations:

That Cabinet:

1. Note the Treasury Management Prudential Indicators outturn position as set out in Section 2 and Appendix 1.

Consideration was given to the report which reviewed the treasury activity for 2025/26 against the Strategy agreed at the start of the year. The report also covered the actual Prudential Indicators for 2025/26 in accordance with the requirements of the Prudential Code. The actual prudential indicators for 2025/26 for Rotherham  ...  view the full minutes text for item 26

Report from the Executive Director of Corporate Services.

Recommendations:

That Cabinet:

1. Note the Treasury Management Prudential Indicators outturn position as set out in Section 2 and Appendix 1.

At the Chair’s invitation Councillor Alam OBE, Cabinet Member for Finance and Community Safety, presented the final Treasury Management report for 2025/26, explaining that its purpose was to review treasury activity against the strategy approved at the start of the financial year. The report set out actual prudential and treasury indicators, in accordance with the requirements of the CIPFA Code, and confirmed that treasury management activities had been undertaken in compliance with relevant legislation, guidance and professional standards, thereby limiting exposure to financial risk.

It was noted that the actual indicators were included in Appendix 1 and that quarterly updates had been provided to the Audit Committee throughout the year. The Council had continued to follow a short-term borrowing strategy on the advice of its treasury advisers, with borrowing undertaken only when required and where repayment was expected to be financed in future years. This approach had resulted in a significant increase in the Council’s net under-borrowing position.

Reference was also made to the ongoing economic uncertainty, with inflation having reduced from the historically high levels experienced in previous years, although market sentiment continued to be affected by conflict in the Middle East. Members were advised that treasury activity, economic conditions and associated risks would continue to be closely monitored and reported through regular updates.

The Service Director, Financial Services highlighted that the changing political environment in the UK could also contribute to further short-term volatility within financial markets. In response to previous discussions on Treasury Management Strategy, it was reported that options were being considered to increase longer-term borrowing over the medium term, should opportunities arise, in order to reduce reliance on short-term borrowing and mitigate associated risks.

It was emphasised that there were no concerns regarding the current level of short-term borrowing, which continued to be reviewed regularly with the Council’s external treasury advisers. The approach was noted to be consistent with that adopted by many other local authorities across the sector.

Councillor Yasseen sought clarification on why the Council’s reported under-borrowing position excluded short-term borrowing, noting that the position appeared significantly different when short-term borrowing was taken into account. It was asked whether there was a legal or technical reason for this approach and whether the overall borrowing position should be a cause for concern. The Service Director, Financial Services explained that the treatment was a technical requirement of the Treasury Management Code of Practice, which defines and measures under-borrowing against long-term borrowing rather than short-term borrowing. While the Council reported both long-term and short-term borrowing positions, the under-borrowing calculation was assessed using long-term borrowing only.

In response to a further question, it was confirmed that inclusion of short-term borrowing would not materially alter the overall assessment of the Council’s financial position, which remained robust. However, it was acknowledged that short-term borrowing carried refinancing and interest rate risks, as borrowing would need to be renewed within a relatively short period. Members were advised that these risks were actively monitored by the Treasury team on a day-to-day basis,  ...  view the full minutes text for item 23