Agenda item

To submit the report of the Director of Function (Resources)/Section 151 Officer.

The report of the Director of Function (Resources)/Section 151 Officer incorporating the annual Treasury Management review for 2024/25 was presented for consideration. The report provides an economic update, sets out the current borrowing position, reviews  investment performance and evaluates the Council’s current position against the performance indicators set out in the annual Treasury Management Strategy.

Councillor Robin Williams, Deputy Leader and Portfolio Member for Finance and Housing presented the report as required by the CIPFA Code of Practice on Treasury Management and the CIPFA Prudential Code for Capital Finance in Local Authorities and he noted that that the Governance and Audit Committee had reviewed the report on 16 July and that it would be presented to Full Council on 25 September, 2025. The report’s simplified format had been positively received by the Governance and Audit Committee.

The Director of Function (Resources)/Section 151 Officer outlined the report’s key elements comprising of an overview of the economic factors which affect the Council’s treasury management decisions, the Council’s capital expenditure and its impact on treasury management activity and the Council’s borrowing position. He advised that the Council’s strategy has remained to avoid external borrowing due to high interest rates instead utilising the Council’s internal cash reserves to fund capital expenditure as shown in Table 5 of the report. A shift towards external borrowing may be required towards the end of the current financial year in order to maintain adequate cash flow. If external borrowing becomes necessary, it will be short-term with refinancing anticipated in 2026/27 when interest rates are expected to fall.  With regard to investment, higher balances in April due to Welsh Government funding, grants and Council Tax receipts enabled increased investment. As cash balances are used and reduce throughout the year the capacity to invest declines. However, sustained interest rates and additional grant income have resulted in higher than budgeted for returns, thereby boosting the Council’s finances.

The Director of Function (Resources)/Section 151 Officer confirmed that the Council had complied fully with the performance indicators and authorised limits set out in the 2024/25 Treasury Management Strategy (Table 7 refers). The report is positive and demonstrates prudent and responsible financial management.

The Executive welcomed the report and endorsed the Council’s sensible approach to treasury management and use of public funds.

Councillor Dafydd Roberts raised a query about the sharp increase in loan repayments in 2052/53 (Appendix 1 – Total Loans outstanding as at 31 March 2025 by repayment year) and how this aligns with the Well-Being of Future Generations Act. The Director of Function (Resources)/Section 151 Officer explained that some of the loans on the schedule are historic dating back a number of years, and that the aim when borrowing is to spread the repayments evenly over a number of years. With regard to 2052/53, planning will be required nearer the time either to take out new borrowing to repay some or all the debt or by refinancing in a timely way when interest rates are favourable. Early repayment can incur penalties which can exceed the interest saved.

It was resolved to note the Treasury Management Review report for 2024/25 and to recommend its approval by the Full Council at its meeting on 25 September 2025.