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Agenda item

Annual Treasury Management Strategy and Annual Non-Treasury Investment Strategy 2026/27

Purpose:

The Council is required to approve a Treasury Management Strategy and Non-Treasury Investment Strategy (Investment Strategy) for 2026/27 prior to 01 April 2026.

 

This report presents the draft Treasury management Strategy Statement (TMSS) for 2026/27 (Annex A), draft Non-Treasury Investment Strategy (Annex B) and draft Minimum Revenue Provision (MRP) Statement (Annex C). These have been prepared in accordance with

  • The CIPFA Prudential Code (2021)
  • The CIPFA Treasury Management Code of Practice (2021)
  • Ministry of Housing, Community and Local Government (MHCLG) revised statutory guidance on Local Government Investments.

Together they set out the Council’s approach to borrowing, investment, cash flow management and prudent capital financing for the year ahead.

Minutes:

The Chair noted the attendance of a guest speaker, an Auditor from the Council’s external auditors Bishop Fleming, and allowed the Deputy Chief Executive Officer to introduce the report. The Deputy CEO noted that treasury management was in effect the management of the Council’s cash, and that the strategy was an explanation of how the Council would approach utilising liquidity for investment purposes and how, for example; the levels of risk involved, how decisions would be made, how an investment opportunity’s value was calculated, and how long they might persist on the Council’s books.

The items of particular focus were Annex A, pages 35-36, which listed the proposed organisational cash limits for recommendation by the Committee to Council and the treasury management prudential indicators, which were required to be set for the year and subsequently reported on how they had been met. Page 47 of Annex A listed non-treasury investment, explained by the Deputy CEO as anything the Council invests in that was not part of day-to-day treasury management. Page 52 included Table 3 which was a list of the investment properties in the Council’s possession; the Committee was advised that this, as well as the non-treasury investment strategy, was required to provide information on the makeup and performance of the Council’s property portfolio and how this impacted more widely the financial position of Cotswold District Council.

The Committee queried the performance of the Council’s commercial investment properties, noting that recent market conditions may have adversely affected their value. Members sought clarification on whether reported gains and losses related solely to annual performance or reflected variance from original purchase prices, and asked whether original acquisition values were available. The Deputy CEO advised that while this information was held by the Council, it was not readily available for the out-of-district portfolio at the time the report was prepared. To avoid presenting incomplete information, original purchase prices were therefore excluded, with the report instead showing property valuations for 2024, final valuations at the end of 2025, and projected values for 2026.

The Deputy CEO further explained that the three most recent out-of-district acquisitions had been purchased for significantly more than their current valuations, resulting in an unrealised loss, which was already reflected in the Council’s statement of accounts. It was noted that the Treasury Management Strategy did not incorporate rental income, which had partially offset these losses over time; however, as the report remained in draft form, the inclusion of this information could be considered ahead of submission to Full Council. The report therefore presented investment performance based on the most recent 12-month period, with asset valuations reviewed annually in line with accounting requirements, as full lifetime performance data was not available at the time of preparation. The Chair requested the perspective of the external auditor in attendance on how these properties were valued and maintained as investments, who commented that as long as the Council remained in line with CIPFA requirements it would be down to individual officers to make appropriate judgements on a case by case basis.

Supporting documents:

 

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