1. Treasury Management Update 2026-27 Q1

Recommended · This went to the meeting on Thu 10 Sep 2026. What was decided is in that meeting's minutes.

A Treasury Management Update for the first quarter of 2026/27, to Audit Committee, reports that treasury management activities were conducted in accordance with the Council's Treasury Management Strategy and all relevant CIPFA prudential requirements, with no breaches of treasury or prudential indicators. p1p8

Average cash balances available for investment during the quarter were £13.5 million, generating a weighted average return of 3.85%, while the Council's outstanding external debt remained at £62.2 million across 20 Public Works Loan Board loans with an average interest rate of 2.82%, and no new external borrowing was undertaken during the quarter. p9

Audit Committee is asked to note that the current interest rate environment presents an opportunity to realise a premature repayment discount on six existing loans totalling £11 million, generating estimated lifetime savings of £2.311 million and a net present value benefit of £2.862 million, requiring less than £6 million of replacement funding. p70

The Committee is asked to consider the proposal and recommend approval in principle, subject to final market conditions, liquidity assessments, affordability tests and compliance with the Council's Treasury Management Strategy. p71

Show the 5 passages this is based on

• p1Report Template v29.0 Report to: Audit Committee Date of Meeting: 10 th September 2026 Report Title: Treasury Management Update – 2026/27 Quarter 1 Report By: Kit Wheeler (Chief Finance Officer)
• p8Report Template v29.0 Executive Summary Treasury management activities during the first quarter of 2026/27 were conducted in accordance with the Council’s approved Treasury Management Strategy and all relevant CIPFA prudential requirements. The Council remained within all authorised borrowing and investment limits throughout the period, and no breaches of treasury or prudential indicators were reported. Performance for the quarter indicates that the General Fund is currently on budget, with no variance against the approved treasury management budget.
• p9The Council continued to prioritise the security and liquidity of its investments while achieving appropriate investment returns. Average cash balances available for investment during the quarter were £13.5 million, generating a weighted average return of 3.85%, slightly exceeding the SONIA benchmark rate. Total investments at 30 June 2026 amounted to £13.0 million, held primarily with highly rated counterparties. Investment income remains on track to achieve the annual budget target of £877,000. No new external borrowing was undertaken during the quarter. The Council's outstanding external debt remained at £62.2 million, comprising 20 Public Works Loan Board (PWLB) loans with an average interest rate of 2.82%. Whilst borrowing of approximately £15.9 million may be required later in the year to support the capital programme, officers continue to monitor market conditions and cash balances to ensure borrowing is undertaken at the most advantageous time. A significant development during the quarter has been the identification of a debt rescheduling opportunity involving six existing PWLB loans with a combined value of £11 million. Preliminary analysis indicates that the proposal could generate estimated lifetime savings of £2.311 million and a net present value benefit of £2.862 million through the utilisation of favourable early repayment discounts. Subject to final market conditions and affordability assessments, the proposal would strengthen the Council's financial resilience, reduce long-term debt commitments and improve the financial position transferred to the successor authority ahead of Local Government Reorganisation in 2028.
• p7048. The Audit Committee is asked to note that the current interest rate environment presents an opportunity to realise a significant premature repayment discount on six existing loans, generating estimated lifetime savings of £2.311 million and an NPV benefit of £2.862 million. The proposal requires less than £6 million of replacement funding to extinguish £11 million of debt and provides substantial front-loaded savings that strengthen the Council's financial resilience ahead of Local Government Reorganisation.
• p7149. Having considered the financial appraisal, treasury management implications and the forthcoming establishment of a new East Sussex unitary authority from 1 April 2028, the Committee is requested to consider the proposal, which represents a prudent and financially advantageous restructuring opportunity and recommend approval in principle, subject to final market conditions, liquidity assessments, affordability tests and compliance with the Council's Treasury Management Strategy. Community Municipal Investment (CMI) – Update