Tower Hamlets Council Treasury Management Report Highlights Savings and Refinancing Risk

Tower Hamlets Council's treasury management report for the 2025/26 financial year has revealed significant savings, but also highlighted a persistent refinancing risk.

The Audit Committee heard on Thursday, 24 September 2026, that while investment income exceeded its budget by £1.7 million due to higher short-term interest rates, the council maintained an under-borrowed position. This strategy minimised interest expenses by utilising cash balances, but it presents a future refinancing risk if interest rates were to increase significantly.

Paul Audu, Interim Head of Pensions & Treasury, presented the Treasury Management Outturn Report for 2025/26, confirming that all treasury management activities complied with approved limits and prudential indicators. The council's total debt remained below the authorised limit throughout the year.

At 31 March 2026, the council held £68.7 million of loans with an average interest rate of 3.01% for its long-term borrowing. While the report details the types of borrowing, such as from the Public Works Loan Board (PWLB) and banks, it does not explicitly outline the maturity profile of this debt.

However, the report also detailed that the council's Capital Financing Requirement (CFR) increased to £658.8 million, with a forecast to rise to £856.5 million by 2028/29. This increase is largely driven by planned capital expenditure, particularly in the Housing Revenue Account (HRA), which is projected to see significant investment in new homes and acquisitions.

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The Audit Committee meeting information can be found in the Agenda Pack.