Brent Council's Cabinet has reviewed the Treasury Management Outturn Report for the 2025-26 financial year, detailing the council's borrowing and investment activities. Despite a challenging economic environment marked by high interest rates and market volatility, the council reported responsible financial management.
During the 2025-26 financial year, Brent Council's borrowing increased by £174.0 million to £1,074.0 million. This increase was primarily to support the council's capital programme, which includes investments in new and affordable homes, special educational needs provision, local infrastructure, and other assets intended to deliver long-term benefits for residents. The council's strategy for borrowing aims to balance low interest costs with cost certainty and flexibility, employing a little and often
approach to borrowing to respond to changes in interest rates, manage costs, and reduce exposure to risk.
Cash investments held by the council decreased slightly to £43.8 million. This decrease from £47.3 million is attributed to the repayment of maturing debt and ongoing investment in the council's capital programme. The average interest rate on borrowing rose marginally to 3.90%, while the rate of return on cash investments decreased to 3.81%. The council's strategy for managing cash reserves is to invest in short-term investments with high credit ratings, providing security and liquidity.
As liquidity improves and longer-term surplus cash becomes available, opportunities to diversify into alternative investment products will continue to be kept under review, provided security and liquidity are not compromised.
The report confirmed that the council had complied with its Prudential Indicators, set to ensure that borrowing remains affordable and sustainable. Key indicators for 2025-26 included a Capital Financing Requirement (CFR) of £1,412.3m and Gross Debt of £1,074.1m. The Authorised Limit for External Debt was set at £1,800.0m, with an Operational Boundary for External Debt at £1,600.0m. The upper limit for the one-year revenue impact of a 1% movement in interest rates on maturing debt was £5.0m, with an actual impact of £0.5m. The maturity structure of fixed-rate borrowing and the ratio of financing costs to net revenue stream (9.0% actual) were also within approved limits. The upper limit for total principal sums invested over 364 days was £50.0m, with an actual of £0.0m. At 31 March 2026, the portfolio's average credit rating was A+ and total cash available within 3 months was £43.8m.
Councillor Gwen Grahl, Deputy Leader and Cabinet Member for Finance and Resources, presented the report, highlighting the council's commitment to investing in the borough while managing its finances responsibly. She thanked the finance colleagues for their expertise in navigating complex financial times.
The report also detailed the council's investment activity, which prioritises security and liquidity over yield, with investments predominantly held in short-term, low-risk money market funds. The council confirmed compliance with all Prudential Indicators and the CIPFA Treasury Management Code of Practice. However, the report acknowledges that 100% of Brent's investments remain subject to bail-in exposure, a higher proportion than similar London authorities and the average for Arlingclose local authority clients. Diversification into alternative investment products is being reviewed to mitigate this risk without compromising security or liquidity.
Furthermore, the council holds £39.5m of LOBO loans. One loan totalling £9.5m is due for an interest rate review in 2026/27. If the lender exercises their option, the council will consult with treasury management advisors to determine whether to repay the loan or accept higher interest rates.
The full report can be found in the Public Reports Pack for the Cabinet meeting held on Monday 7 September 2026.