Issue - meetings

Report of the Director – Finance and Corporate Services

The Finance Business Partner presented the Capital and Investment Strategy Q2 Update for 2025/26.

In relation to the economic forecast, the Finance Business Partner said that inflation had fallen to 3.6% in October and that interest rates had held at 4% but were expected to fall in December, with two further cuts anticipated in the new year. She said that the UK economy had marginally expanded in quarter 3.

In relation to investment income, the Finance Business Partner referred to paragraphs 4.4 to 4.9 and said that the Council had budgeted to receive £1.4m in interest receipts this year and that projections currently exceeded this. She referred to Appendix A which detailed the full list of investments held at the end of September and to Appendix B which detailed diversified funds which had seen significant fluctuation over the last few years, but which had returned an average of 5.8% and were held for long term gain.

In relation to prudential indicators, the Finance Business Partner referred to Appendix C, and said that there was currently a projected underspend on capital arising primarily from the need to reprofile expenditure on Warm Homes to match allocation and land acquisition for carbon offsetting not yet being committed.

In relation to the Council's underlying need to borrow for capital expenditure, the Finance Business Partner referred to Table 3 which showed the forecast reduction in internal borrowing after deduction of MRP repayments. She said that the projected figure for net income from commercial and service investments to net revenue streams was marginally higher than expected due to lower utility costs and that the liability benchmark showed a credit balance which indicated that the Council did not need to borrow over the medium term.

The Finance Business Partner referred to Table 4 which detailed commercial investments which demonstrated the Council’s reliance on commercial income which was projected to account for 12.2% of total income to the Council.

The Finance Business Partner said that the next training session with Arlingclose was scheduled for 6 January 2026.

In conclusion, the Finance Business Partner said that the UK economy was still very fluid, with falling interest rates and slow economic growth.

Councillor Om referred to Table 4 and property income and asked whether it had dropped. The Finance Business Partner confirmed that it had due to vacancies in Bridgford Hall and at the Point.

Councillor G Wheeler asked about vacancies at the Point, noting that there was always a sign on the building saying that there were vacancies and asked whether this was accurate. The Assistant Director of Finance said that a response would be provided to the Group.

It was RESOLVED that the Governance Scrutiny Group reviewed and commented as necessary on the Capital and Investment Strategy update position as of 30 September 2025.