Barking and Dagenham Council recently reviewed its Treasury Management Strategy Statement 2025/26 Mid-Year Review, providing an update on the council's investment and cash flow management. The review, presented at the Assembly meeting on Wednesday, 19 November 2025, included updates on investment returns, borrowing costs and regulatory compliance.
The council's treasury management ensures it can meet its capital funding requirements while maintaining sufficient cash flow. This is achieved by investing surplus funds in low-risk, short-term counterparties to ensure accessibility when needed for capital projects. The council invests surplus monies, for example, funds that will be used for potentially future capital works. The specific counterparties are not listed in the provided information.
Cllr Dominic Twomey, Leader of the Council, explained that the council aims to invest in low-risk counterparties with short-term accessibility, so the council has access to that cash when they need to invest it in capital projects. Specific capital projects being funded by treasury management activities were not listed in the provided information.
The report (TM 2025-26 Mid Year Review Report) highlighted the broader economic situation, including interest rates and inflation, which are vital to the council's borrowing capacity and cost pressures on salaries and external contracts. Cllr Twomey noted two interest rate cuts during the financial year and five since July 2024, indicating a positive trend. However, interest rate forecasts from external advisors remain high through 2026 and early 2027, impacting borrowing repayments, as the council would like to lock in to longer-term borrowing, as opposed to the current short-term cycle. The specific projected impact on the council's budget is not detailed in the provided information.
The review also detailed the council's borrowing position, including the general fund, housing revenue account, and investment and acquisition strategy. Section 4.7 of the report shows the council's revenue position for both the general fund and investment and acquisition strategy, noting shortfalls in both areas. The specific magnitude of these shortfalls is not provided in the available text. Despite these shortfalls, both are bringing in a budget return, although not as high as forecast in the medium-term financial strategy. Work is underway to address these shortfalls for the upcoming financial year, but they will not negatively affect the current year's budget, as they are covered by previous year's reserves. Specific measures being taken to address the revenue shortfalls in the general fund and investment/acquisition strategy for the upcoming financial year are not listed in the provided information.
Cllr Moin Quadri raised concerns about the council's debt, stating it is now over £1.5 billion, with more than £1 billion linked to investment and acquisition strategies. He questioned why these risks were not addressed earlier and what steps would be taken to manage borrowing and investment safely. Cllr Twomey responded that the investments have delivered over 3,000 new quality homes and a year-on-year income reinvested in services and job protection. He stated that the investment has stopped residents from living in poor quality temporary accommodation and helped them to have more independent, healthier lives by living in better quality accommodation.
Cllr Dorothy Akwaboah supported Cllr Twomey's comments, noting that Cllr Quadri was party to all the decisions that were taken.
