Issue - meetings

This report provides an update to the Audit Committee on the Council’s treasury management activities and performance for the six months ending 30^th September 2025, in accordance with the CIPFA Code.

Mr Sam Masters, Head of Finance (Pensions & Treasury), introduced the report.

At this point in the proceedings, the meeting agreed to suspend standing order 18 in order to conclude the meeting.

The meeting heard:

·         The assessments on table 7 of the agenda papers referred to the credit ratings of the Council’s counterparties. ArlingClose did a global rating of the entire local government sphere within the United Kingdom and this was where the ratings came from.

·         The operating limits would be revised. There had been work around IFRS and minimum revenue provision um that ArlingClose had undertaken three chances of work. The treasury management strategy would be updated before it was submitted to Cabinet. This was an exceptional case because of a change in reporting requirement (from a change in accounting legislation). The Council would expect the figures that it budgeted for in the strategy to encompass all the requirements.

·         The PWLB rates were driven by gilt yields. As central government had sought to reduce its own cost of borrowing and because of uncertainty around long-term rates, it had reduced the supply of long duration gilts within the market. This meant that the gilts that remained in the market would achieve a higher than anticipated return because of contraction of supply and an increase in demand. This was why long-term duration gilts were high and this was what drove the Council’s long-term borrowing costs.

·         The Council had opted for the lower durations. This was in conjunction with ArlingClose who had been advising the Council to opt for the 10-year equal instalment loans from PWLB. Those were better costs for local authorities and so the Council had not been purchasing ones that lasted 30, 40 or 50 years. 

·         Regular update meetings were held with advisers and the appropriate strategy was taken from month to month.

RESOLVED:

1. To note the treasury management activity undertaken during the financial year to 30th September 2025 and the performance achieved which is attached as Appendix 1 to this report.

2. To note that all treasury activities were undertaken in line with the approved Treasury Management Strategy.