Agenda item

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The Assistant Director for Finance and Deputy Section 151 Officer presented the 2025–2026 Treasury Outturn, explaining the Council’s capital financing, borrowing limits, interest costs and cash position.

Independent Member, Michael Laird, questioned the position on the £10 million long-term loan from Barclays. In response to a question, the Assistant Director for Finance and Deputy Section 151 Officer confirmed that the opportunity had been identified with the Council’s Treasury advisers, who had then liaised with Barclays. The loan had been refinanced at £8 million, producing a discount of slightly more than £2 million. Accounting rules required the benefit to be spread over ten years, reducing annual borrowing costs by just over £200,000.

In response to Independent Member, Sean Beckett, the Assistant Director for Finance and Deputy Section 151 Officer explained that capital expenditure in 2025–2026 was £39.561 million. Of this, £20.92 million was funded during the year through £6.7 million of capital receipts, £11.2 million of grants and £3.79 million from reserves and revenue. The remaining £18.6 million was financed through working capital and added to the Capital Financing Requirement (CFR).

The Vice-Chair questioned whether the rising CFR created a significant risk and when the authorised limit might be reached. The Assistant Director for Finance and Deputy Section 151 Officer advised that the current capital programme was not expected to create material additional pressure, although new schemes would require Cabinet-approved business cases.

The Assistant Director for Finance and Deputy Section 151 Officer explained that the CFR represented unfinanced capital expenditure, including spending on vehicles, equipment, buildings and housing. It was reduced progressively through the Minimum Revenue Provision, approximately £2 million annually, and could also be reduced through capital receipts. Capital receipts used directly for new capital expenditure did not reduce the CFR.

The Chair, Councillor de Winton, highlighted the role of the housing companies, West Norfolk Housing Company and West Norfolk Property Limited. He provided useful context to the Independent Members regarding the housing companies.

The Council paid £1.5 million in external interest during 2025–2026, around £955,000 more than budgeted because slower housing sales required additional borrowing. External borrowing was approximately £40 million, compared with an operational boundary of £84 million and an authorised limit of £94 million, leaving approximately £59.9 million of headroom against the CFR. The Assistant Director for Finance and Deputy Section 151 Officer confirmed that borrowing remained within the approved limits and was being used to fund capital rather than revenue expenditure.

In response to the Vice-Chair, Councillor Bearshaw, the Assistant Director for Finance and Deputy Section 151 Officer confirmed that forecasts were regularly reviewed using Bank of England and Office for Budget Responsibility information, together with benchmark rates from MUFG, the Council’s Treasury advisers. Because rates had been volatile, the Council had deliberately kept borrowing and investments relatively short term so that it could respond to rate changes and refinance for longer periods when appropriate.

Councillor Morley explained that the Council’s housing companies faced higher construction costs, flood-related development costs, slower sales and narrower margins, but that the programme was being monitored through the Shareholder Committee, which all Members were welcome to attend, and through dedicated financial monitoring arrangements.

RESOLVED: The Audit Committee noted the annual treasury outturn position for 2025/2026.