URL: https://moderngov.fareham.gov.uk/ieDecisionDetails.aspx?ID=2746

Decision Maker: Executive

Outcome: Recommendations Approved

Is Key Decision?: Yes

Is Callable In?: Yes

Purpose: The report considers the Treasury Management Strategy and Investment Strategy for 2026/27, prior to its submission to the Council for approval.   Regulations require the Council to prepare and formally approve both the annual Treasury Management Strategy and Investment Strategy. The latest document updated for 2026/27 is attached as Appendix A to the report for consideration by the Executive before being submitted to Council for approval.   In the past 12 months, the Council’s investment balance has ranged between £17 million and £40 million, lower levels are expected in the forthcoming year due to capital programme expenditure.  The Council expects to be a long-term borrower and new treasury investments will therefore be made primarily to manage day-to-day cash flows using short-term low risk instruments.  The existing portfolio of strategic pooled funds will be maintained to diversify risk into different sectors and boost investment income.   Borrowing levels are expected to be £70.5million at the end off 2026/27, compared to £70.6 in the last strategy.  The Council has previously raised all of its long-term borrowing from the Public Works Loan Board (PWLB) but will consider long-term loans from other sources.   Some minor amendments have been made to the Approved Counterparties in paragraph 13 where the time limit for secured investments has been reduced from 25 years to 10 years and the counterparty limit for local authorities and government entities has been increased from £4 million to £5 million.   Additional text has also been added to paragraph 17 b) to take into account Local Government Reorganisation.  The counterparty limit for loans to local authorities will be increased to an unlimited amount where (a) the government has announced that this Council will merge with the borrowing authority and (b) the loan is scheduled to be repaid after the expected date of the merger.   The Council has maintained a reserve of £500,000 to mitigate the impact of the statutory override on accounting for gains and losses on pooled investment funds which has been extended until 1 April 2029, as unrealised losses on pooled investment funds are required to be recognised in the General Fund.

Content: The report considers the Treasury Management Strategy and Investment Strategy for 2026/27, prior to its submission to the Council for approval.   Regulations require the Council to prepare and formally approve both the annual Treasury Management Strategy and Investment Strategy. The latest document updated for 2026/27 is attached as Appendix A to the report for consideration by the Executive before being submitted to Council for approval.   In the past 12 months, the Council’s investment balance has ranged between £17 million and £40 million, lower levels are expected in the forthcoming year due to capital programme expenditure.  The Council expects to be a long-term borrower and new treasury investments will therefore be made primarily to manage day-to-day cash flows using short-term low risk instruments.  The existing portfolio of strategic pooled funds will be maintained to diversify risk into different sectors and boost investment income.   Borrowing levels are expected to be £70.5million at the end off 2026/27, compared to £70.6 in the last strategy.  The Council has previously raised all of its long-term borrowing from the Public Works Loan Board (PWLB) but will consider long-term loans from other sources.   Some minor amendments have been made to the Approved Counterparties in paragraph 13 where the time limit for secured investments has been reduced from 25 years to 10 years and the counterparty limit for local authorities and government entities has been increased from £4 million to £5 million.   Additional text has also been added to paragraph 17 b) to take into account Local Government Reorganisation.  The counterparty limit for loans to local authorities will be increased to an unlimited amount where (a) the government has announced that this Council will merge with the borrowing authority and (b) the loan is scheduled to be repaid after the expected date of the merger.   The Council has maintained a reserve of £500,000 to mitigate the impact of the statutory override on accounting for gains and losses on pooled investment funds which has been extended until 1 April 2029, as unrealised losses on pooled investment funds are required to be recognised in the General Fund. RESOLVED that the Executive:   (a)  endorses the draft Treasury Management Strategy and Investment Strategy for 2026/27, with the agreement of a cap of £5 million for counterparty loans for local authorities, attached as Appendix A to the report; and   (b)  agrees to submit the Strategy to Council for approval.

Date of Decision: February 2, 2026