Croydon Council has approved its Annual Treasury Management Review for the 2025/26 financial year, confirming that the council's borrowing and investment activities complied with the CIPFA Code of Practice and Prudential Code.
The review, presented to the Council's Audit and Governance Committee and subsequently to Full Council, indicated that the council maintained an under-borrowed position throughout the year. This means that internal cash resources were utilised to manage borrowing needs, rather than relying solely on external loans. The Council's strategy aimed to minimise new long-term borrowing at relatively elevated rates and structured new borrowing over periods of 1-6 years to balance cost management with risk. This approach was considered prudent as near-term investment rates were generally lower than medium to long-term borrowing costs, which are expected to fall.
Investment income for the year was reported as being slightly higher than budgeted. The report also detailed the council's gross borrowing position against its Capital Financing Requirement (CFR). At 31 March 2026, the total gross borrowing position stood at £1,792.8m, with a Capital Financing Requirement (CFR) of £1,968.2m. This represents an increase from the £1,662.4m gross borrowing position recorded at 31 March 2025.
The average interest rate paid on the council's debt increased slightly from 3.64% at 31 March 2025 to 3.83% at 31 March 2026. The primary reason cited for this increase is that borrowing costs remain high, and they are expected to continue to rise as market conditions are influenced by economic growth concerns and the eventual dampening of inflation.
Treasury management activities are overseen by the Audit and Governance Committee, which reviews the council's treasury management strategy, policies, and activities. The committee also scrutinises borrowing and investment performance against agreed prudential and treasury indicators. The full details of the review can be found in the Public reports pack, available here.
