Issue - meetings

To receive and make comments on the Treasury Management Strategy Statement 2026/27.

Report to follow.

The Panel received a copy of the draft Treasury Management Strategy Statement (TMSS) 2026/27. The Council has adopted the Chartered Institute of Public Finance and Accountancy’s Treasury Management in the Public Services: Code of Practice (CIPFA Code) which requires the Council to approve a Treasury Management Strategy before the start of each financial year. The draft TMSS was presented to OSC for scrutiny. Any comments made OSC would be taken into account by Audit Committee and, where appropriate, reflected in the final TMSS presented to Council on 2 March 2026.  The TMSS and covering report were introduced by Sam Masters, Head of Treasury & Banking, as set out in the addendum report pack at pages 17-58. The Corporate Director of Finance and Resources, the Director of Finance and the Cabinet Member for Finance and Corporate Resources were all present for this agenda item. The following arose as part of the discussion on this item:

1. The Chair queried the extent to which the level of proposed borrowing was sustainable. It was acknowledged that Housing Revenue Account (HRA) borrowing and borrowing in the General Fund (GF) were separate, and that a significant portion of the borrowing in the GF related to Exceptional Financial Support (EFS). The Chair sought assurances around the extent to which Table 1 and Table 8 in the report gave conflicting information, with Table 8 appearing to indicate that the ratio of increased borrowing costs were broadly flat in relation to net revenue. In response, officers advised that in real terms, as revenue increased, that by 2031 20% of the £400m revenue budget would equate to £80m. It was acknowledged that this was a huge amount of money that would be spent on servicing debt, rather than on providing services. Officers acknowledged that the information presented in the table could be misleading
2. The Corporate Director of Finance commented that this was the first year that the report had separated out the financing costs within the HRA, GF and EFS. It was acknowledged that as a totality the level of debt was unsustainable and was higher than most neighbouring boroughs. The Corporate Director commented that it was important to understand that the three areas of debt were all slightly different. It was commented that the level of debt was increasing faster on the HRA than the GF, particularly as a lot of work had been done in looking at the viability of capital projects in the General Fund. Whilst the HRA had higher levels of spend, this also generated additional revenue through additional rental income. It was commented that reliance on EFS was the only option at present, but that the Council had to do everything it could to reduce reliance on EFS over the next two to three years. It was set out that ultimately £500m of EFS over five years was not sustainable, but that it was important to understand that this was a working assumption at this point.
3. The Chair commented that Table 9 showed that the ratio  ...  view the full minutes text for item 75