Agenda item

Report by the Strategic Director of Finance and Customer Services.

Recommendations:

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

Consideration was given to the report which presented the review of the treasury activity 2024/25 against the Strategy agreed at the start of the year. The report also covered the actual Prudential Indicators for 2024/25 in accordance with the requirements of the Prudential Code. The report met the requirements of both the CIPFA Code of Practice on Treasury Management and the CIPFA Prudential Code for Capital Finance in Local Authorities.

The Council was required to comply with both Codes through regulations issued under the Local Government Act 2003.

The Council received an Annual Treasury Strategy Report in advance of the 2024/25 financial year at its meeting on 28 February 2024 and Audit Committee received a mid-year report at its meeting on 26 November 2024, representing a mid-year review of treasury activity during 2024/25. In addition, quarterly updates were received by Audit Committee on 26 September 2024 and 11 March 2025.

The Council had reduced its investment balances in recent years as funds have been used to meet loan maturities rather than refinancing at historically high interest rates. In 2024-25 the Council borrowed an additional £95m from Local Authorities and PWLB (Public Works Loans Board). In addition, the Council repaid £55.2m of principal on a mix of Local Authority, PWLB and LOBO (Lender Option Borrower Option) loans on which the lender exercised its option to increase interest rates to above market rates. The Bank of England Base Rate decreased from 5.25% to 4.50% during 2024/25 as inflation started to fall from the previous highs. As at 31 May 2025 the base rate sat at 4.25%.

Careful management of these factors through the Council’s treasury strategy had helped to control the Council’s interest costs. Taken together the additional return on investments, reduced borrowing need and further slippage on the Council’s Capital Programme had enabled an £8m underspend on the 2024/25 Treasury Management budget that had been used to support the Council’s 2024/25 overall outturn position.

The report was considered by the Overview and Scrutiny Management

Board (OSMB), who advised that the recommendations be supported.

Resolved:

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