Croydon Council is reviewing its treasury management activities for the first half of the 2025/26 financial year, ensuring it adheres to financial regulations and strategies, as its historic debt continues to place a heavy burden on the council and taxpayers. With the council's effective interest rate on debt currently standing at 3.8%, repayments are forecast to be around £71 million next year simply to service that debt.
The Treasury Management Strategy Statement and Annual Investment Strategy Mid-Year Review Report 2025/26 was discussed at a recent cabinet meeting, highlighting compliance with the Chartered Institute of Public Finance and Accountancy (CIPFA) codes. The report was prepared in accordance with the requirements of the Chartered Institute of Public Finance and Accountancy (CIPFA) codes of practice in respect of capital finance and treasury management. The codes require that Members are advised of treasury management activities of the first six months of each financial year and of compliance with various strategies and policies agreed by the Council.
Key aspects of the review include:
- Compliance: Adherence to the Treasury Management Strategy Statement and Annual Investment Strategy approved by the council.
- Activity: Examination of borrowing and investment activities from April 1, 2025, to September 30, 2025.
- Indicators: Confirmation of compliance with Treasury and Prudential Indicators and the CIPFA Prudential Code for Capital Finance.
 rates from April 1, 2025, to September 30, 2025, showing trends for different loan durations and a 50-year target percentage.
The 50-year target percentage shown in the PWLB rates chart is 5.80% on 01/04/2025 and 5.98% on 30/09/2025. This represents the interest rate for borrowing from the Public Works Loan Board (PWLB) for a 50-year term and serves as a benchmark for Croydon Council's long-term borrowing strategy.
The council's treasury advisor, MUFG Corporate Markets, provided an economic update and interest rate forecasts, which are included in the Public reports pack.
According to the report, the Council’s effective interest payable on debt currently stands at 3.8%. The report also noted that the Council’s historic borrowing and subsequent debt burden and national, regional and local service pressures continue to be critical to the non-sustainability of the Council’s revenue budget.
The Executive Mayor and Cabinet is recommended to:
- Consider the recommendations from Audit and Governance Committee on 27 November 2025 relating to the Treasury Management Strategy Statement and Annual Investment Strategy Mid-Year Review Report 2025/26.
- Consider the contents of this report and associated appendices, and
- Make such recommendations to Full Council as are considered appropriate.
