Agenda item

A report which sets out the proposed Treasury Management Strategy for 2026/27, to support the Corporate Objectives of the Council.

The Audit Committee considered a report of the Director of Finance, which presented the Treasury Management Strategy for 2026/27.

The report outlined the Treasury Management Strategy for 2026/27, the Annual Investment Strategy, Borrowing Strategy, and Prudential Indicators. The Council is required through regulations supporting the Local Government Act 2003 to ‘have regard to’ the Prudential Code. The report was required to produce an annual Treasury Strategy for borrowing and to prepare an Annual Investment Strategy setting out the Council’s policies for managing its investments and for giving priority to security and liquidity of those investments. The Strategy for 2026/27 covers.

a.    Economic Update.

b.    Prospects for Interest Rates

c.     The Current Balance Sheet and Treasury Position

d.    Liability Benchmark

e.    The Borrowing Strategy

f.      Debt Rescheduling

g.    The Investment Strategy

h.    Approved Counterparties, risk management and Investment Limits

i.      Treasury Indicators which limit the treasury risk and activities of the Council.

The report outlined the implications and key factors in relation to each of the above Capital and Treasury Management issues and made recommendations regarding the Treasury Management Strategy for 2026/27.

The report included the most recently available economic background commentary which was reflective of the position in December 2025. The proposed Treasury Management Strategy was presented to enable scrutiny of the report before its further consideration, by the Cabinet and Council, as part of the budget setting process and any comments or observations arising from the report, from Members of the Audit Committee, would be incorporated into future reports.

Options/Alternatives considered:

In accordance with the CIPFA Code of Practice on Treasury Management, the Audit Committee and the Cabinet, at its meeting on 9^th February 2026, would have no alternative to considering and commending the report to the Council, at its meeting on 4^th March 2026. Therefore, no options or alternatives were presented.

In considering the report a Member sought clarification on the short-term borrowing level detailed in paragraph 2.6.1 of the report. This was explained by the fact that short-term borrowing could be achieved at lower rates of interest than longer-term borrowing, therefore saving the authority money. Another factor associate with this was the funding of the Council’s Capital Programme that often required short-term borrowing and in this regard the Council was able to borrow funds at low rates of interest form another local authority in Greater Manchester. The Director of Finance advised the Committee that when the 2025/26 budget was being planned there was an expectation that certain amounts of borrowing would be required and this had factored into the reports that the Cabinet and Council had approved. The Cabinet Member for Finance, Corporate Services and sustainability noted that in the worst-case scenario the Council could borrow funds from the Public Works Loans Board but due to diligent and prudent financial planning and management of resources this was unlikely to ever happen.

Resolved:

That the Audit Committee commends the following matters, detailed in the submitted report, to the Cabinet and Council:

1.     The Capital Financing Requirement (CFR) Projections, as detailed in paragraph 2.4.1, of the submitted report.

2.    The Projected Balance Sheet position, by 31^st March 2026 and future years as detailed in paragraph 2.4.1, of the submitted report.

3.    The Liability Benchmark as detailed in paragraph 2.5, of the submitted report.

4.    The Borrowing Strategy for 2025/26 as detailed in paragraph 2.6, of the submitted report.

5.    The Annual Treasury Investment Strategy as detailed in paragraph 2.7, of the submitted report, including counterparties and treasury limits.

6.    The Treasury Management Prudential Indicators as detailed in paragraph 2.8, of the submitted report.