Agenda Document Pack - Council - 26/02/2026
Renfrewshire Council · 26 February 2026
Back to Council — 26 February 2026 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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17/02/2026 Notice of Meeting and Agenda Council Date Time Venue Thursday, 26 February 2026 09:30 Council Chambers (Renfrewshire), Council Headquarters, Renfrewshire House, Cotton Street, Paisley, PA1 1AN Membership Provost Lorraine Cameron (Convener): Councillor Iain Nicolson (Leader): Councillor Cathy McEwan (Depute Convener): Councillor Jacqueline Cameron (Depute Leader): Councillor Jennifer Adam: Councillor Fiona Airlie-Nicolson: Councillor Alison Ann-Dowling: Councillor Stephen Burns: Councillor Michelle Campbell: Councillor Graeme Clark: Councillor Carolann Davidson: Councillor Eddie Devine: Councillor Andy Doig: Councillor Audrey Doig: Councillor Chris Gilmour: Councillor Edward Grady: Councillor Gillian Graham: Councillor Neill Graham: Councillor John Gray: Councillor Anne Hannigan: Councillor John Hood: Councillor Lisa-Marie Hughes: Councillor Robert Innes: Councillor Alec Leishman: Councillor Bruce MacFarlane: Councillor James MacLaren: Councillor Kenny MacLaren: Councillor Mags MacLaren: Councillor Colin McCulloch: Councillor Janis McDonald: Councillor David McGonigle: Councillor Jamie McGuire: Councillor Marie McGurk: Councillor Iain McMillan: Councillor John McNaughtan: Councillor Kevin Montgomery: Councillor Sam Mullin: Councillor Will Mylet: Councillor Jim Paterson: Councillor Emma Rodden: Councillor John Shaw: Councillor Ben Smith: Councillor Andy Steel: Members of the Press and Public Members of the press and public wishing to attend the meeting should report to the customer service centre where they will be met and directed to the meeting. Hybrid Meeting Please note that this meeting is scheduled to be held in the Council Chambers. However, it is a hybrid meeting and arrangements have been made for members to join the meeting remotely should they wish. MARK CONAGHAN Head of Corporate Governance Page 1 of 118
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17/02/2026 Further Information This is a meeting which is open to members of the public. A copy of the agenda and reports for this meeting will be available for inspection prior to the meeting at the Customer Service Centre, Renfrewshire House, Cotton Street, Paisley and online at http://renfrewshire.cmis.uk.com/renfrewshire/CouncilandBoards.aspx For further information, please email democratic-services@renfrewshire.gov.uk Webcasting of Council Meeting This meeting will be filmed for live or subsequent broadcast via the Council’s internet site – at the start of the meeting the Provost will confirm if all or part of the meeting is being filmed. Generally the public seating areas will not be filmed. The cameras focus on the main participants. If you have any queries regarding this please contact Committee Services on democratic-services@renfrewshire.gov.uk. To find the webcast please navigate to: https://renfrewshire.public-i.tv/core/portal/home and select the meeting from the calendar. Information Bulletin To reduce the reporting of routine operational matters to Policy Boards, to allow Boards to focus on major policy issues and to streamline business for Members’ consideration and determination, a Bulletin, issued in line with the Council meeting timetable, is produced. The Bulletin is intended to provide members with a concise summary of significant decisions and action taken by officers in the exercise of their delegated powers, and details of issues which do not require a decision. A copy of the Bulletin has been attached under separate cover to this agenda. Procedures for Budget Meeting Copies of the notes of the procedures to be followed in respect of consideration of (i) the Revenue Estimates and Council Tax; and (ii) the Housing Revenue Account Budgets, Rent Levels and Capital Investment Plans are attached to the relevant reports. Section 112 Statement Members’ attention is drawn to the enclosed statement regarding declarations in terms of Section 112 of the Local Government Finance Act, 1992. Page 2 of 118
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17/02/2026 Items of business Apologies Apologies from members. Declarations of Interest and Transparency Statements Members are asked to declare an interest or make a transparency statement in any item(s) on the agenda and to provide a brief explanation of the nature of the interest or the transparency statement. 1 Provost's Update Hear from Provost 2 Minutes of Meetings of Council, Boards and Panels Minutes of Meetings of Council, Boards and Panels (attached under separate cover) 3 Revenue Budget and Council Tax 2026/27 Report by Director of Finance & Resources 9 - 40 4 Non-Housing Capital Investment Programme, Prudential Framework and Treasury Management Strategy, and Capital Strategy 2026/27 – 2035/36 Report by Director of Finance & Resources 41 - 96 5 Housing Revenue Account Budget & Rent Levels 2026/27 to 2027/28 and Housing Capital Investment Plan 2026/27 to 2030/31 Joint report by Directors of Environment, Housing & Infrastructure and Finance & Resources 97 - 116 6 Governance Arrangements Report by Director of Finance & Resources 117 - 118 7 Notice of Motion 1 by Provost L Cameron and Councillor Paterson "Declaration of ‘Dolly Day’ in Renfrewshire Council notes: • That 2026 marks the 80th birthday of Dolly Parton, an internationally respected artist, philanthropist and advocate for literacy. Page 3 of 118
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17/02/2026 • That Dolly Parton is the founder of the Imagination Library, a globally recognised early years literacy programme which gifts free, high-quality books to children from birth to age five. • That the Imagination Library operates successfully in Renfrewshire, supporting families, improving early language development, encouraging a lifelong love of reading, and helping to reduce educational inequality. • That early years literacy is strongly linked to improved educational outcomes, wellbeing, confidence, and life chances for children across all communities. Council recognises: • The significant positive impact the Imagination Library has had for children and families across Renfrewshire, particularly in supporting early learning, parental engagement, and inclusion. • The value of partnership working between the Council, community organisations, and national partners in delivering the Imagination Library locally. • Dolly Parton’s enduring commitment to children, education and opportunity, which aligns closely with Renfrewshire Council’s priorities around tackling inequality, improving wellbeing, and investing in our youngest residents. Council therefore resolves: • To formally declare a ‘Dolly Day’ in Renfrewshire, to be marked annually, in honour of Dolly Parton’s 80th birthday and her outstanding contribution to literacy and early years development through the Imagination Library. • To use ‘Dolly Day’ as an opportunity to celebrate reading, imagination and learning, and to promote the benefits of the Imagination Library to families across Renfrewshire. • To encourage schools, early years settings, libraries, and community organisations to participate in age-appropriate celebrations and activities which highlight the importance of books, storytelling and imagination. • To reaffirm the Council’s support for initiatives that improve early years outcomes and help ensure every child in Renfrewshire has the best possible start in life." 8 Notice of Motion 2 by Councillors Davidson and McDonald "Renfrewshire Carers Centre 30th Anniversary Page 4 of 118
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17/02/2026 Council notes that January 2026 marked the 30th anniversary of Renfrewshire Carers Centre, established from the campaigning work of “Carers Action Renfrew District” and funding from the Princess Royal Carers Trust. A year of celebratory activity follows. Council recognises the growth of the centre, which started with 2 members of staff and has grown to 81 staff and over 30 volunteers, to help meet the identified needs of carers locally. Council recognises the major social and economic contribution the centre has in Renfrewshire and congratulates all the staff, volunteers and carers involved over the last 30 years." 9 Notice of Motion 3 by Councillors N Graham and McGonigle "Council agrees with Scottish Labour Leader Anas Sarwar that the leadership in Downing Street must change. Council further agrees that Sir Keir Starmer should resign as Prime Minister of the United Kingdom." Page 5 of 118
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LOCAL GOVERNMENT FINANCE ACT 1992 - SECTION 112 RESTRICTIONS ON VOTING BY MEMBERS The attention of Members is drawn to the provisions of Section 112 of the Local Government Finance Act, 1992. This section has the effect of restricting the voting rights of Members on certain issues if they are in arrears with Council Tax payments. The legislation applies to a Member in attendance at a meeting of the Council, or of a Committee or Sub-Committee of the Council or representing the Council’s interest at a Joint Committee meeting or Sub-Committee thereof. If at the time of the meeting a Member is 2 months or more in arrears in payment of the Council Tax, the Member will be restricted in voting on matters which relate to: 1. Setting or adjusting the rate of Council Tax; 2. Matters relating to the administration, enforcement and collection of the Council Tax or Council Water Tax. If a Member falls into arrears as defined by the legislation, the Member is required to disclose this fact at any relevant meeting as soon as practical after it starts. The Member may participate in any debate on the relevant agenda item but the Member should not vote on any matters related to the agenda item. If the Member does not disclose the restriction due to arrears of Tax and/or votes on a restricted issue the Member will have committed an offence, and on convictions, will be liable to a fine not exceeding level 3 on the standard scale (currently £1,000). The Member will not be guilty of the offence if he/she can prove he/she did not know: (a) that Section 112 of the 1992 Act applied to him/her at the time of the meeting; (b) the tax item was the subject of consideration at that meeting. The responsibility for identifying whether a Member is in arrears with Council Tax rests with the Member. Page 7 of 118
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PROCEDURE TO BE FOLLOWED AT THE MEETING OF RENFREWSHIRE COUNCIL TO BE HELD ON 26 FEBRUARY 2026 DURING CONSIDERATION OF ITEM 3 CONCERNING REVENUE ESTIMATES AND COUNCIL TAX FOR THE FINANCIAL YEAR 2026/27 The purpose of this note is to give Members advance notice of the procedure which Provost Cameron has agreed should be followed at the Meeting of the Council on 26 February 2026. 1. The Convener of the Finance, Resources & Customer Services Policy Board (the Convener) will make his budget statement for financial year 2026/27 and move as appropriate. He will then speak to the principal points of his proposals. The motion will require to be seconded. 2. The Leader of the Council will second the motion and may address the meeting then or reserve the right to speak at a later stage of the debate. 3. For the purposes of the subsequent discussion and voting, the Convener's proposals will be taken as one motion. 4. An opportunity will then be given to the Leaders of the opposition groups and any other Members to move, and to have duly seconded, comprehensive amendments to the motion (i.e. taking together proposals for resource allocations, budget proposals, revenue estimates and the level of the council tax for the financial year 2026/27). 5. The motion and any amendments will require to be produced in writing and a copy given to each of the Members present prior to being spoken to at the meeting. Provost Cameron may then adjourn the meeting for 20 minutes to allow Members to consider the terms of the motion by the administration and any amendments by the opposition groups or other Members. Corporate Meeting Rooms have been arranged for the adjournment as follows: Administration – Corporate Meeting Room 2, Labour - Corporate Meeting Room 1, Conservative – Corporate Meeting Room 3, Independents – Communications Room, Reform - Marriage Suite. 6. There shall be no formal restriction upon the length of time given to the Convener and the Leaders of the opposition groups and any other Members to move their respective budget statements and speak in support of the principal points of their proposals. However, Provost Cameron shall have the power to require any person speaking to limit their speech in order to facilitate the conduct of the meeting. 7. Provost Cameron will then invite other Members to take part in the debate including Conveners of the Policy Boards who may wish to take the opportunity to respond concerning the services for which they have responsibility. 8. The debate will conclude with Provost Cameron giving the Convener the opportunity to reply. 9. A vote or votes will then be taken in accordance with the provisions of standing orders. Item 3 Page 9 of 118
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PUBLIC To: Council On: 26 February 2026 Report by: Director of Finance & Resources Heading: Revenue Budget and Council Tax 2026/27 1. SUMMARY 1.1. This report provides Members with an overview of the Council’s financial position on the General Services Revenue budget and sets out relevant information to enable the Council to set its budget and Council Tax for 2026/27. Members are required to bring forward proposals to secure a balanced budget and to assist in this, Directors have been providing details of the financial, service and equality implications of any changes to current service levels, as requested by Members. 1.2. Members will be aware that the Council continues to experience a challenging and complex set of financial circumstances. It remains the case that the financial environment that local government in Scotland is facing remains difficult, with substantial risks even in the short term in relation to cost growth and income constraints. 1.3. Members will require to take these circumstances into account when setting the 2026/27 budget, recognising that the Council’s immediate and medium-term challenges remain significant. 1.4. The economic outlook remains volatile. Inflation rates have fallen to target levels, but interest rates have been sustained at a higher level for longer than expected and economic growth forecasts remain subdued. The year ahead is unlikely to see much improved prospects, as the degree of uncertainty remains high due to geo- political concerns. Page 11 of 118
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PUBLIC 1.5. The Draft Scottish Budget was announced on 13 January, again for one financial year only. Resources were prioritised to social security and health, which naturally places other areas of the public sector under increased financial pressure. 1.6. The local government settlement is presented in the Draft Budget as having increased by £592m in 2026/27; however, much of this increase relates to existing or new burdens, e.g. local government pay and teachers’ pay, i.e. funding that is not available to local government to address core spend pressures. The additional unearmarked sum amounts to c£235m nationally. While this increase is welcome, it is marginal in terms of the scale of cost growth the Council has experienced in recent years. 1.7. The Council’s allocation has increased from £469m (on which the Council’s 2025/26 budget was based) to £493m – a gross £23.6m or 5.0% increase. 1.8. The key elements of the Council’s revenue settlement are set out as follows: - i) Circular 1/2026 confirmed Scottish Government revenue grant funding in 2026/27 for the Council of £487.999m. The Local Government Finance Order laid before Parliament on 17 February updated this allocation to £492.696m. ii) After adjusting for new responsibilities, areas of growing responsibility and other conditional aspects of the settlement, this provides a like-for- like comparison to 2025/26 where the Council’s underlying core grant has increased by £11.9m (2.5%). 1.9. The Scottish Government also published their Public Sector Pay Policy for the medium term period 2026/27 to 2028/29, restating the 9% pay envelope covering three years from 2025/26 to 2027/28, with flexibility for employers to configure three-year proposals within this range. The current agreed pay deal leaves only 2.5% of this envelope for 2027/28. 1.10. The medium-term financial outlook for the Council remains challenging. Among other significant cost pressures, pay and the revenue grant continue to be the two biggest determinants of the Council’s financial outlook. The Scottish Government Spending Review reports a flat cash projection over the next few years. This is a significant shift from the expected position which was outlined in the Scottish Government Medium Term Financial Strategy published in the summer of 2025, which had indicated average 2.7% cash terms growth in the local government settlement over the period of the strategy. The financial outlook provided to Council in September 2025 therefore requires amendment to reflect this more pessimistic forecast. The current and forecast challenging financial position of Renfrewshire HSCP, and consequent potential impact on the Council financial position is also an increasing concern. Page 12 of 118
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PUBLIC 1.11. The Council has consistently and correctly taken a medium-term view of its financial position, agreeing transformation and savings measures that have ensured the Council positively addresses the forecast medium-term budget deficit, whilst supporting temporary investment in priority areas, and this approach continues into 2026/27. 1.12. Applying a central range of assumptions for the three-year period beyond 2026/27, derives a forecast budget deficit of broadly £40m over this period (before any decisions on the level of Council Tax, but after assumed delivery of known recurring savings). This forecast outlook is based on relatively tight grant and pay assumptions informed by the current financial settlement and information in the UK Government 2025 Budget and Scottish Government Spending Review, as well as likely affordability constraints in relation to future pay awards. 1.13. For 2026/27, budget assumptions have been updated as appropriate, including the confirmed grant available to the Council and associated conditions, the impact of new obligations, the likely impact of increasing demographic and demand pressures and expected Council Tax yield levels for 2026/27. After taking account of the cumulative impact of each of these issues, there is a recurring budget deficit for 2026/27 of £2.121m, subject to any further decisions taken by Members. 1.14. Given the ongoing financial sustainability challenge that lies ahead for the Council, in setting the 2026/27 budget, it is strongly recommended that any commitments by Members that would result in additional recurring expenditure (that would have the effect of increasing the projected medium-term deficit in future years) should be supported by offsetting sustainable savings, or increased resources arising from an increase in Council Tax. 2. RECOMMENDATIONS 2.1. Members are asked to:- 2.2. Submit for approval proposals for any savings, investments, and service changes as part of delivering a balanced budget for 2026/27, and in doing so: • consider the equality impact of any proposed service changes as referred to at paragraph 8.3; and • assess whether adequate provision is being made in the 2026/27 budget to deliver against the specified commitments linked to the Council’s grant settlement for 2026/27, as detailed at section 4. 2.3. Approve the provisions for inflationary pressures, as recommended at section 5. Page 13 of 118
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PUBLIC 2.4. Approve the revenue estimates for all services for 2026/27 subject to adjustment for the allocation of specific grants, inflationary allowances and any proposals for service changes approved by Council. 2.5. Approve the financial measures outlined in section 5, including the release of additional resources made available in 2026/27 to Renfrewshire Health and Social Care Partnership. 2.6. Approve the proposals in relation to reserve balances as recommended in section 12. 2.7. Submit for approval the Council Tax banding levels A to H inclusive to apply for 2026/27, noting the information outlined in section 9. 3. FINANCIAL OUTLOOK UPDATE 3.1. Successive reports to the Council have highlighted the challenging financial and economic environment the Council continues to face, predominantly linked to the legacy of recent high levels of inflation. 3.2. The year ahead is unlikely to see much improved prospects over that experienced in recent years; however the Council has improved certainty over forecast spend given the two year pay deals agreed in 2025/26. The global political and economic environment remains volatile, with public spending requirements necessarily remaining reactive to global events. 3.3. Beyond 2026/27, the Council’s medium-term financial outlook has been revised to an assumed flat-cash revenue settlement over the medium term, with a slight improvement in share anticipated based on the relative population growth of Renfrewshire. However, and as outlined in previous reports, it is cost increases that are driving the extremely challenging financial outlook. Incorporating an affordable level of pay increase over the 5 year period 2026/27 to 2030/31, and a reducing level of inflation on supplies and services costs suggests that the Council would be facing a c£80m funding gap by 2030/31, before any decisions on council tax. Assuming a 5.0-6.5% council tax increase in over this period, this would reduce the funding gap to c£40m. A significant level of savings will therefore still be required over the medium term in order to maintain financial sustainability. 3.4. Council has previously been advised that since 2010, transformation, efficiency and corporate financing savings in the region of £190m (up to 2025/26), have been achieved, meaning that the Council’s ability to generate further recurring transformation and efficiency savings at this scale without impacting on service delivery or quality will be increasingly challenging. Additionally, over the last decade, nationally set directives as part of grant settlements as well as local priorities, have protected spend in key areas such as Education and Social Care - Page 14 of 118
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PUBLIC which constitute around two thirds of the Council’s budget. While transformation and the opportunity for increased efficiency will continue to be key priorities, it is likely that material service reductions and spending cuts across all services could be necessary if the Council is to remain financially sustainable and also create the financial circumstances to allow longer term strategic investment in the Council’s property estate and infrastructure. 4. GRANT SETTLEMENT 4.1. On 13 January 2026, the Scottish Government published its draft budget for 2026/27, which is subject to parliamentary approval over the course of February 2026. The draft local government finance settlement was also published on this date, as set out in the Local Government Finance Circular 1/2026, which provided details of the provisional revenue and capital funding allocations for 2026/27 for local government across Scotland. There has since been a release of provisional revised settlement figures, on which this report is based. 4.2. Revised settlement figures indicate that Scottish Government revenue grant funding in 2026/27 for the Council will be £492.936m. Included within the local government settlement, the Government has provided an additional £167m nationally to support health and social care as delegated to Integration Joint Boards broken down as follows: • £160m to fund the real Living Wage uplift for adult social care workers in commissioned services via agreed contract uplifts; and • £7m to uplift free personal nursing care rates. 4.3. The Government confirmed that taken together, the total increase in funding is to be additional to each Council’s 2025/26 recurring spending delegated to Integration Authorities and not be substitutional, i.e. these allocations must be passed to the HSCP for these delegated services. This position is explained further in section 5 below. 4.4. The Cabinet Secretary also outlined a number of other issues: • The Settlement provides full discretion over decisions on council tax, with no freeze and no cap. An additional 2 bands will be added to the current council tax structure affecting properties valued in excess of £1m. This will not take effect until 1 April 2028. • Local Authorities will retain all the funding paid to them by PackUK under the Extended Producer Responsibility scheme with no adjustment to the Settlement. • There is no provision for Reducing Class Contact Time within the Settlement, although £1m has been set aside to explore and support pilot approaches to implementation. Page 15 of 118
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PUBLIC 4.5. The Council’s settlement figure includes a number of adjustments for new spending burdens, responsibilities, and conditional funding totalling £6.9m, linked primarily to the pass-through of funding to the Integration Joint Board (IJB); and the baselining of funding for the 2025/26 pay awards. 4.6. After adjusting for these areas of new burdens funding, new responsibilities, conditional funding and timing differences in the distribution of funding, the Council’s 2026/27 core grant figure as set out in the provisional local government finance settlement has, on a like-for-like basis, increased by 2.5% from 2025/26, marginally above the assumption which the Council had been working to. The Council’s share of the overall local government revenue funding settlement has increased from 3.27% to 3.30%. 4.7. The total revenue grant funding therefore available to the Council is set out in Table 1 below: Table 1 – Grant Settlement 2026/27 Note: Revenue Support Grant includes an estimated £0.240m for Free Personal Nursing Care not yet confirmed. 4.8. At the time of writing, the Budget Bill remains to be approved by the Scottish Parliament. The final stage in Parliament is scheduled for 25 February 2026, with the Local Government Finance Order anticipated on 26 February 2026. 4.9. As reported to the Council in February 2025, the Council has been notified of an allocation of funding from the UK Government Department for Environment, Food and Rural Affairs (DEFRA) in relation to packaging extended producer responsibilities (PEPR), for 2025/26 and 2026/27, intended to improve sustainability and waste management processes associated with packaging. The notified allocation for Renfrewshire for 2026/27 is £4.383m, which has been baselined into the Council’s 2026/27 Budget. It should be noted that there is some risk to this position, as future funding allocations have not been advised. £000 £000 Estimated Funding Specific Grants 7,490 Non Domestic Rate Income 114,866 Revenue Support Grant 370,580 Total Government Grant 492,936 2026/27Summary of Revenue Estimate 2026/27 Page 16 of 118
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PUBLIC 5. SPENDING AND DEMAND PRESSURES 5.1. An analysis has been enclosed with this report detailing, for each service, the proposed budget changes between 2025/26 and 2026/27. The budget has been adjusted to reflect: i) the continuing costs of the current level of service, including inflationary costs related to current service levels; ii) the financial impact of any decisions already taken by the Council or its Policy Boards, as well as required adjustments to budgets to reflect specific aspects included within the financial settlement. 5.2. Demographic, socio-economic and inflationary factors continue to play a major role in driving core spending pressures for the Council. As has been reported over the course of the year, the legacy of high inflation, along with specific service pressures, has led to overspends across some services in 2025/26, as noted in section 12. 5.3. The CPI measure of inflation stood at 3.4% in December 2025, remaining above the Bank of England’s 2% target, which it expects to achieve over the next 2-3 years. However, given the very significant financial challenges and risks facing the Council over the medium term, and in line with historic practice, general non- pay inflation is not provided for in the 2026/27 budget. Where specific price, service and cost pressures are clear and unavoidable, additional budget provision has been incorporated into the draft position outlined in this report. 5.4. The recommended 2026/27 base budget position detailed in Table 3 includes a provision for pay inflation that reflects what has been agreed nationally (3.5%). In addition, COSLA, following agreement by Council Leaders, has implemented a new pay framework for Scottish local authority chief executives, effective from 1 November 2025. Due to the linkage of chief officer salaries to the chief executive pay scale, the recurring cost impact of this national pay agreement has been provided for in the draft budget. 5.5. The Financial Regulations require charges for services to be reviewed at least annually. The overview of the Council’s spending in Table 3 makes provision of £0.308m for a general inflationary uplift to relevant income charges of 5%. Adult Social Care 5.6. In terms of the core Adults and Older People Services budget, the HSCP most recently reported a 2025/26 forecast year-end overspend position of £3.2m, which will be funded from IJB reserve balances. This position remains subject to change over the remainder of the 2025/26 financial year. The HSCP is also indicating that it faces significant financial pressures moving into 2026/27, however it is currently Page 17 of 118
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PUBLIC expecting to achieve a balanced budget through the application of reserves and the delivery of any further savings options agreed by the IJB. 5.7. The HSCP is currently forecasting a budget gap in the region of £7m in 2026/27, after the transfer of funding outlined below. It should be noted that this is based on current projections and is subject to change until the IJB budget is approved. It is expected that the HSCP will have sufficient reserve balances to address this in year funding gap. 5.8. This will, however, significantly reduce the available IJB reserve balances leave the HSCP with little financial resilience as it enters 2027/28. The Integration Scheme states that should the IJB be unable to achieve a balanced budget for future years, it would be required to seek additional funding from its Partner Bodies. 5.9. As outlined above, there are specific conditions within the local government settlement which mandate the pass-through of funds related to social care to Integration Authorities. In 2026/27 there is a total of £167m within the settlement nationally which requires to be passed through: Table 2 5.10. The allocation for Free Personal Nursing Care is yet to be distributed in the settlement, so the exact figure is not yet confirmed. It is estimated at £0.240m and will be passed through upon confirmation from the Scottish Government. The Council will also pass through the relevant share of the 2025/26 local government pay settlement funding (£0.370m). 5.11. The Scottish Government has announced a further £20m across Scotland of funding for 2026/27 in relation to Adult and Children’s Services Social Care. There is no further detail at this stage on the distribution of this funding, therefore the Council’s potential share has not been incorporated into this draft budget. Once available, details will be reported to a future report to Council. Children’s Services 5.12. Funding in relation to teacher numbers has been maintained within the grant allocation from the Scottish Government without ring-fencing; and while there is no Funding National £m Renfrewshire £m Free Personal and Nursing Care (estimated, not distributed) 7.0 0.240 Living Wage (commissioned) 2026/27 160.0 5.527 Total 167.0 5.767 Page 18 of 118
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PUBLIC specific grant condition in relation to maintaining teacher numbers, this is the clear expectation. There is no change to specific funding for Attainment. 5.13. In terms of known pressures within Education, the ongoing issue of increasing costs of pupil transport are noted, and provision has been included within the draft budget to address this, both in terms of mainstream and ASN transport. Members should note that the pupil transport budgets will have increased by £2.7m in the 3 years since 2023/24 - a near 70% increase. 5.14. The Scottish Government intends to begin a phased reduction in class contact time starting in the 2026/27 school year. This is an emerging pressure, as reduced class contact time will potentially impact on the number of teachers required. There is no allocated funding within the local government settlement to address this cost, and the issue will continue to require close monitoring; however, the planning assumption is that any costs incurred to implement a reduction in class contact time will be fully funded by the Scottish Government. 5.15. On 1 May 2025, the Council decided to reverse an earlier decision taken at the Education and Children's Services Policy Board in March 2024, which aligned Renfrewshire with national early years eligibility legislation, providing access provided the term after a child's third birthday. As noted at the time of the Council’s decision, the financial impact of reversing this decision is additional recurring annual costs of £0.400m within the Early Years budget. This cost has been funded from the Financial Sustainability Fund in 2025/26, and has been included as a recurring cost pressure from 2026/27. 5.16. Within the wider Children’s Service, additional budget provision has been made in line with increased funding for School Clothing Grants, and to fund the Real Living Wage uplift in commissioned Early Years and Children’s Social Care services, where there is also provision made for cost pressures relating to Residential Respite services, Sefl-Directed Support rates, and Throughcare service changes. 5.17. At its meeting on 26 February 2025, the Council approved long-term funding plan to support the 20-year Learning Estate Strategy. This entailed a commitment to set aside £2.5m of revenue resource in 2025/26 with a similar level of increase in supported borrowing to be prioritised within available resources in subsequent years, leading to capital investment capacity approaching £170m. Therefore, these draft budget proposals for 2026/27 include a recurring £3m revenue contribution towards the cost of delivering the Learning Estate Strategy. Page 19 of 118
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PUBLIC Table 3 - Summary of Recommended Base Budget Adjustments 2026/27 6. FINANCING COSTS AND LONG-TERM BORROWING 6.1. The provision for financing costs includes both debt charges payable as a result of the Council's capital investment programme and the interest gained on temporary investment of cash. In setting the 2022/23 budget, Members agreed to adjust the base budget by £7.5m, in the knowledge that this position would require to be unwound over the medium to longer term. 6.2. The proposed base budget for 2026/27 incorporates the continued re-building of the loans charges budget, with a provision of £2.280m included. Provision on this scale will require to be made over the medium to longer term in order to rebuild the core loans charges budget; with non-recurring support as required being provided through a draw on the ringfenced Loan Charges Flexibility fund. The actual position will be influenced by the progress of capital investments, with any rephasing of spend on capital projects in effect deferring the requirement to draw from balances. 6.3. Renfrewshire Council has one of the lowest debt to spend ratios in Scotland. At 31 March 2025, the ratio of financing costs to net revenue stream (General Fund) was 2.9% and the Scottish average at the same date was 6.0%. As noted above, the scale of investment need in the whole learning estate over the long-term period will be increase financing costs in the absence of any Scottish Government support. Impact of previous Council and Board Decisions £000 £000 Financial Sustainability Workstreams (1,121) Directorate Targets (1,459) Corporate budget adjustments (250) Total Reductions (2,830) Add Unavoidable Pressures: Financial Settlement adjustments Health and Social Care 5,767 Reversal of one-off settlement adjustments (2,073) Financial Settlement adjustments Other 3,196 Staff related 495 Contract Payment Adjustments 4,809 Requisition Adjustments 897 Other Unavoidable Pressures 3,270 16,361 Long term debt budget 5,280 Net Increase in Provision for inflationary pressures (pay) 15,366 Net Base Budget Increase 34,177 2026/27 Page 20 of 118
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PUBLIC 7. SAVINGS 7.1. Reports to Council over the course of 2025 and previous years have outlined a range of service transformation activity alongside the development of a range of financial sustainability workstreams which aim to achieve savings over the medium term. Due mainly to significant increases in cost pressures over the years, the Council’s development and delivery of savings has fallen behind the level required to support longer term financial sustainability. 7.2. Council agreed in September 2025 a £6.3m savings target for 2026/27 as a route to maintaining recurring financial balance over the medium term. Directors and their management teams have been developing options to deliver savings at this scale; however, the implementation of proposals is now expected to be phased towards future years. Based on work undertaken by services to date, and that for which specific plans are being developed over the next two years, it is estimated that £2.8m of savings can be confidently incorporated into the 2026/27 base budget. Savings targeted from early intervention, the strategic review of culture and leisure services and income growth will not be achieved as targeted. Departmental savings targets are also proving very challenging to achieve after more than a decade of year on year savings being taken. 7.3. The Council will continue to require to generate savings at scale to ensure ongoing financial sustainability over the medium term. A recent report to the Leadership Board outlined progress on the current phase of transformation, building on a long period of successive change programmes that the Council has undertaken since 2009. 8. EXPENDITURE OVERVIEW 8.1. The Council approved spending for 2025/26 of £588.617m. It is estimated that £622.794m (as detailed in Table 4) is needed to fund the costs of maintaining present service levels, new responsibilities and conditional funding commitments provided as part of the financial settlement, new cost burdens, and addressing known pressures and demands in 2026/27. Page 21 of 118
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PUBLIC Table 4 – Estimated Spending Need 2026/27 8.2. Significant cost pressures are anticipated to persist beyond 2026/27 for the Council. Members will continue to be updated on the medium-term financial position but should be aware that in setting the 2026/27 budget, any commitments to additional recurring expenditure will increase the projected deficit in future years, unless they are offset by recurring savings, or increases in Council Tax or other income. Similarly, any decision taken now to address the future year budget deficits provides greater certainty for service planning and the workforce, and also supports the future financial stability of the Council. 8.3. Where the Council is making decisions in relation to its spending priorities, it is obliged to comply with the public sector equality duty set out in the Equalities Act 2010. This means that the Council must have due regard to the need to: • Eliminate unlawful discrimination, harassment and victimisation and other prohibited conduct; • Advance equality of opportunity between people who share a relevant characteristic and those who do not; and • Foster good relations between people who share a protected characteristic and those who do not. 8.4. To meet this requirement, where necessary the Council must assess the impact of applying a new policy or decision against these three needs and at the point where a decision is made, elected members must have sufficient information available to them to assess that impact. Members, in considering their budget proposals prior to presentation at the Council meeting, are therefore encouraged to seek advice from Directors on the equality implications of each proposal, including any which are covered by the Fairer Scotland duty. Specific service areas may also need to £000 £000 Estimated Funding Estimated Spending need 2025/26 588,617 Adjustments per Table 3 Budget reductions (2,830) Unavoidable budget increases 16,361 Long-term debt budget provision 5,280 18,811 Base Budget 2026/27 607,428 Inflationary cost provision (pay) 15,366 Estimated Spending Need 2026/27 622,794 Summary of Revenue Estimate 2026/27 2026/27 Page 22 of 118
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PUBLIC be impact assessed in relation to Armed Forces Covenant duties or the Environmental Assessment (Scotland) Act 2005. 9. COUNCIL TAX 9.1. The Council’s level of Council Tax (Band D) for 2025/26 is £1,572.61 and is £29.31 (1.9%) above the Scottish average. It is estimated that in 2026/27 each £1 of Council Tax will yield £78,121 gross (£66,071 net of adjustment for Council Tax Reduction), higher than 2025/26. The increase in the yield reflects anticipated growth in the number of dwellings charged (the Council Tax base). 9.2. A maximum net gross yield of £122.8m can be anticipated from the forecast Council Tax base and present Council Tax levels. Within the context of the current service resources, specific collection initiatives continue to be implemented to support the collection of Council Tax, including the recovery of arrears for prior years. It is anticipated that £0.5m will be collected in 2026/27 from prior year levies. 9.3. Members will recall from the financial update report to Council in September that the assumed level of council tax increase for planning purposes was 6.5% over the next two financial years. Increases at this level (assuming all other assumptions hold true) are likely to still leave the Council with a substantial structural deficit over this period, even after planned savings are assumed to have been delivered. 9.4. Members are required to determine the level of Council Tax for Bands A to H inclusive that should apply for 2026/27, considering options for a level of increase that will return the Council to a recurring balanced budget position. 10. RESOURCE ALLOCATIONS 10.1. Appendix 1 attached summarises the provisional resource allocation for each service. The resource allocations will be subject to amendment to reflect the Council's views on budget proposals, inflationary pressures and the allocation of central support costs, specific grants and capital charges. 11. BUDGET OVERVIEW 2026/27 11.1. The overview budget position for the Council for 2026/27, prior to any changes in service levels or Council Tax levels, is outlined in Table 5 below. This overview position confirms a recurring budget deficit position before any council tax decision, which could be temporarily addressed through the application of the ring- fenced Financial Sustainability Fund. As members are aware, the use of ring- fenced reserves can only ever be a temporary solution to the financial position and should only be agreed while substantive measures are taken to move the Council’s finances back to recurring financial balance. Page 23 of 118
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PUBLIC Table 5 – Budget Overview 2026/27 12. PROBABLE OUTTURN 2025/26, BALANCES AND RESERVES 12.1. Appendix 1 to this report details an overview of the Probable Outturn for 2025/26. The Council’s general fund balances as at 1 April 2025 were £138.769m (see Table 6 below) and the significant majority of this was earmarked for specific purposes. This balance also reflects the previously agreed de minimis in unallocated balances of £10m. As reported to Members over the course of 2025/26, an overspend position in the order of £1.7m is projected for council departments (Period 8, excluding Adult Social Care services). 12.2. It remains important that the Council maintains sufficient unallocated reserves to provide an appropriate degree of financial protection and immediate financial resilience moving forward, and that the level of unallocated reserves held is guided by the risk profile faced by the Council. The Financial Sustainability Fund was established for this primary reason, to support the financial position of the Council in circumstances where, in the short term, savings have not been generated at the scale or pace required to ensure financial balance. In 2025/26, the Financial Sustainability Fund benefited from the second (and final) year of low employer pension contributions. 12.3. It is recognised that the financial risk profile for the Council has increased significantly over the past number of years and in this context the Council previously approved to maintain unallocated balances at a minimum £10m. The actual outturn on unallocated balances in 2024/25 of £10.279m represented 1.9% of the Council’s budgeted net expenditure; a level that remains both prudent and appropriate for the Council’s circumstances. As always, the Accounts Commission will continue to closely monitor the Council’s position in respect to unallocated reserves as part of its wider assessment of the Council’s financial stability and resilience. 12.4. Table 6 below summarises the forecast movement and year-end position of General Fund balances, including those earmarked for agreed purposes and 2026/27 £000 Estimated Funding Total Government Grant advised 492,936 Council Tax Income 122,854 Council Tax / Community Charge Arrears Recovery 500 PEPR Funding baselined (DEFRA) 4,383 Total Income 620,673 Total Estimated Spending Need (622,794) Estimated Deficit (2,121) Summary of Revenue Estimate 2026/27 Page 24 of 118
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PUBLIC estimated future liabilities. It should be noted this forecast is subject to some volatility as the 2025/26 financial position is closed out. Table 6 – General Fund Balances 2025/26 12.5. As previously reported to Council in its consideration of the annual accounts, and as detailed in Table 7 below, other specific reserves continue to be maintained. Summary of Usable Reserves 2025/26 Balance at 01/04/2025 Forecast Movement Forecast Balance at 31/03/2026 General Fund Balances £000 £000 £000 Alcohol and Drugs Commission 628 (628) - Children's Services 4,730 (918) 3,812 City Deal 1,550 (813) 737 Civil Contingencies Shared Service 119 - 119 Clydeplan Unfunded Pension Transfer - 145 145 Connected Communities - 75 75 Culture Bid Legacy 1,826 (541) 1,285 Development Contribution – Paisley Town Centre 254 - 254 Digital Infrastructure 441 - 441 Early Years Change Fund 2,100 (68) 2,032 Employability 10,700 (750) 9,950 Environment & Infrastructure 840 50 890 Fairer Renfrewshire Programme 2,336 (767) 1,569 Financial Sustainability Fund 21,198 13,001 34,199 Fly Tipping Enforcement 50 (50) - Homelessness - 348 348 Learning Estate Support Fund 2,000 (167) 1,833 Leisure: Inclusive Play Facility 7 (7) - Loan Charges Flexibility Fund 63,656 1,000 64,656 Local Authority Economic Recovery Fund 100 (100) - Local Heat and Energy Efficiency Strategy 36 (36) - Local Place Plans - 20 20 Oakshaw Heritage Trail 50 (50) - Planning Enforcement 120 (22) 98 Private Sector Housing Grant 2,167 214 2,381 Pupil Equity Fund 661 - 661 Resettlement and Asylum Fund 1,138 (419) 719 School Music Participation 260 - 260 Service Modernisation and Reform Fund 10,174 (1,544) 8,630 Sustainable Communities Fund 260 16 276 Villages Improvement Fund 136 - 136 Welfare Reform 952 (473) 479 Unallocated General Fund Balance 10,280 - 10,280 Total General Fund Balances 138,769 7,516 146,285 Page 25 of 118
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PUBLIC Table 7 – Specific Reserves 2025/26 12.6. The Insurance Fund covers the main classes of insurance and is earmarked for insurance purposes such as the cost of insurance excesses and premiums. 12.7. The DHN Repair and Renewal Fund is earmarked for future component replacement of the District Heating Network at the Advanced Manufacturing Innovation District Scotland (AMIDS). 12.8. The Reservoir Repairs Fund represents funding received from a developer for repairs in perpetuity in relation to the Thornly Dam. 12.9. The Education Capital Items fund is earmarked for specific schools for the planned purchases of a capital nature such as computers and information communication technology equipment. 12.10. The Investment Capital Fund is used to hold planned contributions to the delivery of the ongoing capital investment programmes, as well as resources that support the long-term debt smoothing strategy. These debt smoothing resources are utilised to manage both the debt levels linked with the capital investment programme and the associated debt servicing costs i.e. principal repayments, chargeable to the revenue account each year. 13. BUDGETARY CONTROL 13.1. Directors are expected to manage their approved budgets on a bottom-line basis in accordance with the Financial Regulations. If an overspend emerges during the year on any approved budget line the Director is expected to take corrective action, seeking Policy Board approval for any policy changes involved in such actions. Members should also be aware that, given the reliance on non-recurring reserves to produce a balanced budget, any further decisions taken by the Council or Policy Boards to increase spend over the course of the year must give consideration to how this spend will be funded. Summary of Usable Reserves 2025/26 Balance at 01/04/2025 Forecast Movement Forecast Balance at 31/03/2026 Specific Reserves £000 £000 £000 Insurance Fund 3,029 100 3,129 DHN Repair and Renewal Fund 186 - 186 Reservoir Repair Fund 358 15 373 Education Capital Items Fund 1,407 (112) 1,295 Investment Programme Capital Fund 79,028 (17,201) 61,827 Total Specific Reserves 84,008 (17,198) 66,810 Total Usable Reserves 222,777 (9,682) 213,095 Page 26 of 118
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PUBLIC 14. FURTHER ACTION 14.1. Members wishing clarification of the details of this report or the enclosed Revenue Estimates pack should contact the Director of Finance & Resources or the Chief Executive or any Director in relation to their specific service responsibilities. 14.2. Members wishing advice on budget proposals should contact the appropriate service Director. ————————————————————————————————————— Implications of the Report 1. Financial - The report and enclosures provide the background information on the 2026/27 revenue budget, identifying a recurring deficit position in year, with a significant budget deficit of up to c£80m forecast over the medium term, before any decisions on council tax. Council is required to set council tax levels for 2026/27. 2. HR & Organisational Development - implications will be subject to any budget proposals agreed. 3. Community/Council Planning – implications will be subject to any budget proposal agreed. Members should however keep in mind that over the medium term the Council is anticipated to have to continue to increasingly make key choices to direct resources to support the delivery of those outcomes of greatest priority as defined in the Council Plan. 4. Legal – the Council is legally required to set a balanced budget by 11 March each year. 5. Property/Assets - implications will be subject to any budget proposals agreed. 6. Information Technology - implications will be subject to any budget proposals agreed. 7. Equality & Human Rights - Where the Council is making decisions in relation to its spending priorities, it is obliged to comply with the public sector equality duty set out in the Equalities Act 2010. Further detail is outlined in Section 8 of this report. 8. Health & Safety – none arising directly from this report. 9. Procurement – none arising directly from this report. 10. Risk - As outlined in the report, the Council continues to be faced with significant financial risk in setting its 2026/27 budget. The financial Page 27 of 118
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PUBLIC outlook over the medium term remains loaded with downside risks, and the scale of cost reduction necessary to align Council spending with available resources over the medium term brings with it additional risk for the Council. In recognition of this, it is critical that the Council’s financial resilience is maintained and that decisions taken by the Council pay due regard to the medium-term financial outlook. 11. Privacy Impact - implications will be subject to any budget proposals agreed. 12. Cosla Policy Position – implications will be subject to any budget proposals agreed. 13. Children’s Rights - implications will be subject to any budget proposals agreed. 14. Climate Risk – implications will be subject to any budget proposals agreed. Author: Alastair MacArthur, Director of Finance & Resources Page 28 of 118
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PUBLIC APPENDIX 1 RENFREWSHIRE COUNCIL PROVISIONAL RESOURCE ALLOCATION STATEMENT (subject to amendment by any budget proposals approved by Council) * Includes £4.040m of non-recurring items. The recurring Budget position in 2025/26 is a surplus of £3.195m. Note: The Probable Outturn at Period 8 2025/26 includes a £1.742m forecast overspend for Council General Services, and £5.393m for Adult Social Care (which will require to be drawn from IJB reserves). Net Expenditure Budget before Council Decisions Revised Budget* Probable Outturn Draft Estimates £000 £000 £000 £000 Children's Services 265,513 268,865 269,926 286,852 Adult Services 111,803 111,792 117,185 118,259 Environment, Housing and Infrastructure 64,919 69,568 70,366 79,282 Finance and Resources 45,739 46,189 46,114 52,379 Miscellaneous Services 41,738 41,762 41,762 24,339 Leisure Services 14,096 14,144 14,144 14,907 Chief Executive Services 11,059 12,391 12,349 13,296 Loans Fund 9,251 9,228 9,228 14,258 Strathclyde Passenger Transport 3,379 3,379 3,379 3,479 Renfrewshire Valuation Joint Board 1,650 1,650 1,650 1,743 Corporate Items 14,000 14,000 14,000 14,000 Total Estimated Spending Need 583,147 592,968 600,103 622,794 Funding Income (per Table 5) (581,206) (592,123) (592,123) (620,673) Budget Deficit 1,941 845 7,980 2,121 2025/26 2026/27 Page 29 of 118
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PUBLIC# RENFREWSHIRE COUNCIL PAPER 1 SUMMARY OF 2026/27 REVENUE ESTIMATES CHILDREN'S SERVICES Analysis of Change between 2025/26 and 2026/27 £ 2025/26 Estimates 280,739,729 Adjustment to Current Year Estimates Settlement Adjustments: School Clothing Grants 10,000 Educational Psychologists 4,000 Children’s Social Care Pay Uplift in Commissioned Services 747,000 Teachers' Pay 2025/26 1,549,000 Early Years Provider Rates 396,000 Justice Specific Grant increase 179,000 Gaelic Specific Grant increase 5,000 2,890,000 Unavoidable Pressures: Annual Contractual PPP Indexation Adjustment 470,000 Early Years Eligibility Criteria additional cost 400,000 Early Years Provider Rates 695,000 Children's social care pressures 1,206,000 ASN Transport contractual increase 460,000 School waste collection and disposal 350,000 Mainstream Schools Transport contractual increase 420,000 4,001,000 Transfers (to) / from other Services: Early Years Provider Rates - NIC impact 294,000 Employer Pension increase to 17.5% 345,104 639,104 Proposed Savings: Financial Sustainability Workstreams (663,333) Directorate Workstreams (460,000) (1,123,333) 2026/27 Estimates (before Council decisions) 287,146,500 Page 30 of 118
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PUBLIC# RENFREWSHIRE COUNCIL PAPER 1 SUMMARY OF 2026/27 REVENUE ESTIMATES ADULT SERVICES Analysis of Change between 2025/26 and 2026/27 £ 2025/26 Estimates 111,791,559 Adjustment to Current Year Estimates Settlement Adjustments: Social Care Living Wage 2026/27 5,527,000 Free Personal and Nursing care 240,000 5,767,000 Unavoidable Pressures: LG Pay Funding 370,000 370,000 2026/27 Estimates (before Council decisions) 117,928,559 Page 31 of 118
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PUBLIC# RENFREWSHIRE COUNCIL PAPER 1 SUMMARY OF 2026/27 REVENUE ESTIMATES ENVIRONMENT, HOUSING AND INFRASTRUCTURE Analysis of Change between 2025/26 and 2026/27 £ 2025/26 Estimates 71,155,406 Adjustment to Current Year Estimates Unavoidable Pressures: Paisley Grammar Community Campus Building Management 97,757 Annual Contractual Indexation Adjustment - Clyde Valley Waste 152,000 Ferguslie Belltrees Grounds Maintenance 25,000 Inflation on Food and Provisions (Soft FM) 349,000 Fleet maintenance inflationary pressure 200,000 HVO Fuel rollout 287,000 Waste collection pressure due to increased households 95,000 Property Lifecycle Maintenance 1,500,000 Inflation on Cleaning Materials (Soft FM) 50,000 Contractual inflation on waste disposal 526,000 3,281,757 Transfers (to) / from other Services: Employer Pension increase to 17.5% 5,240,414 5,240,414 Proposed Savings: Financial Sustainability Workstreams (150,000) Directorate Workstreams (246,000) (396,000) 2026/27 Estimates (before Council decisions) 79,281,577 Page 32 of 118
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PUBLIC# RENFREWSHIRE COUNCIL PAPER 1 SUMMARY OF 2026/27 REVENUE ESTIMATES FINANCE AND RESOURCES Analysis of Change between 2025/26 and 2026/27 £ 2025/26 Estimates 48,188,174 Adjustment to Current Year Estimates Settlement Adjustments: Discretionary Housing Payments initial grant allocation 238,000 238,000 Unavoidable Pressures: ICT software maintenance contractual increases 251,500 ICT contract renewals and migrations 199,000 WiFi in schools and corporate estate 20,000 Other contractual increases (Postage and Occupational Health) 161,500 Elected Member Remuneration 48,000 Removal of Clydeplan SLA income 8,000 Staffing and job evaluation review costs 263,900 External audit fees increase 23,000 974,900 Transfers (to) / from other Services: Election software increases 27,200 Employer Pension increase to 17.5% 3,703,700 3,730,900 Proposed Savings: Service Redesign (various services) (666,900) Non-staffing savings (various services) (61,000) Licensing and registration income (25,000) (752,900) 2026/27 Estimates (before Council decisions) 52,379,074 Page 33 of 118
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PUBLIC# RENFREWSHIRE COUNCIL PAPER 1 SUMMARY OF 2026/27 REVENUE ESTIMATES MISCELLANEOUS SERVICES Analysis of Change between 2025/26 and 2026/27 £ 2025/26 Estimates 22,151,705 Adjustment to Current Year Estimates Settlement Adjustments: Impact of one-off 2025/26 adjustments (2,073,000) (2,073,000) Unavoidable Pressures: Increase in Water charges 102,000 102,000 Transfers (to) / from other Services: Election software increases (27,200) Early Years Provider Rates - NIC impact (294,000) Employer Pension increase to 17.5% to other services (10,173,218) (10,494,418) Inflationary uplift (proposed): Financial Sustainability Workstreams - Fees and Charges Uplift (5%) (308,000) Pay inflation 2026/27 14,996,900 14,688,900 2026/27 Estimates (before Council decisions) 24,375,187 Page 34 of 118
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PUBLIC# RENFREWSHIRE COUNCIL PAPER 1 SUMMARY OF 2026/27 REVENUE ESTIMATES LEISURE SERVICES Analysis of Change between 2025/26 and 2026/27 £ 2025/26 Estimates 14,143,758 Adjustment to Current Year Estimates Unavoidable Pressures: Requisition increase re pay inflation 2026/27 463,300 Provision for PMR increased running costs 300,000 763,300 2026/27 Estimates (before Council decisions) 14,907,058 Page 35 of 118
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PUBLIC# RENFREWSHIRE COUNCIL PAPER 1 SUMMARY OF 2026/27 REVENUE ESTIMATES CHIEF EXECUTIVE SERVICES Analysis of Change between 2025/26 and 2026/27 £ 2025/26 Estimates 12,189,731 Adjustment to Current Year Estimates Unavoidable Pressures: Houstoun Court - rental income loss 48,000 Planning and Building Standards review 75,400 Contractual increases 99,300 222,700 Transfers (to) / from other Services: Employer Pension increase to 17.5% 884,000 884,000 2026/27 Estimates (before Council decisions) 13,296,431 Page 36 of 118
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PUBLIC# RENFREWSHIRE COUNCIL PAPER 1 SUMMARY OF 2026/27 REVENUE ESTIMATES LOANS FUND Analysis of Change between 2025/26 and 2026/27 £ 2025/26 Estimates 9,228,176 Adjustment to Current Year Estimates Unavoidable Pressures: Learning Estate Strategy 3,000,000 Loan Charges rebuild 2,280,000 5,280,000 Proposed Savings: Service Concession Flexibility (IFRS16) (250,000) (250,000) 2026/27 Estimates (before Council decisions) 14,258,176 Page 37 of 118
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PUBLIC# RENFREWSHIRE COUNCIL PAPER 1 SUMMARY OF 2026/27 REVENUE ESTIMATES STRATHCLYDE PASSENGER TRANSPORT Analysis of Change between 2025/26 and 2026/27 £ 2025/26 Estimates 3,378,698 Adjustment to Current Year Estimates Transfers (to) / from other Services: Inflationary increase in SPT requisition 100,000 100,000 2026/27 Estimates (before Council decisions) 3,478,698 Page 38 of 118
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PUBLIC# RENFREWSHIRE COUNCIL PAPER 1 SUMMARY OF 2026/27 REVENUE ESTIMATES RENFREWSHIRE VALUATION JOINT BOARD Analysis of Change between 2025/26 and 2026/27 £ 2025/26 Estimates 1,650,150 Adjustment to Current Year Estimates Settlement Adjustments: Increase in Barclay requisition to RVJB 68,000 Unavoidable Pressures: Increase in core requisition to RVJB 25,300 2026/27 Estimates (before Council decisions) 1,743,450 Page 39 of 118
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PUBLIC# RENFREWSHIRE COUNCIL PAPER 1 SUMMARY OF 2026/27 REVENUE ESTIMATES FUNDING INCOME Analysis of Change between 2025/26 and 2026/27 £ 2025/26 Estimates (Gross) (591,811,892) Adjustment to Current Year Estimates Settlement Adjustments GRG + NDRI Increase (23,682,800) DEFRA Funding (4,382,882) Specific Grant adjustment (184,000) Council Tax base growth (611,431) (28,861,113) 2026/27 Estimates (before Council decisions) (620,673,005) Page 40 of 118
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PUBLIC ___________________________________________________________________ To: Council On: 26 February 2026 ___________________________________________________________________ Report by: Director of Finance & Resources ___________________________________________________________________ Heading: Non-Housing Capital Investment Programme, Prudential Framework and Treasury Management Strategy, and Capital Strategy 2026/27 – 2035/36 ___________________________________________________________________ 1. Summary 1.1. This report details the planned Non-Housing Capital Investment Programme for projects across all service areas of the Council, except Council Housing. Funding available to support this investment includes prudential borrowing and capital grant, as well as contributions from revenue, partners and external funding bodies. In light of long-term strategic investment decisions and commitments made by the Council during 2025, it is now presented as a 10-year rolling programme. 1.2. The draft Scottish Government budget for 2026/27 was published on 13 January 2026, alongside a provisional local government finance settlement outlined in Finance Circular 1/2026. The General Capital Grant for Renfrewshire Council in 2026/27 is £11.706m, which represents a reduction of £0.419m in core funding; however, a number of funding streams are still to be distributed, including Active Travel, which is reported to now include funding for the former Cycling Walking and Safer Streets Specific Grant (ring-fencing removed). 1.3. The level of recurring general capital grant allocated to local government in the draft Scottish Budget for 2026/27 (£569m) represents a like-for-like reduction of 14% from the 2025/26 allocation. In the context of this funding environment, the scope for any investment in assets, including lifecycle maintenance, is significantly reduced, unless other sources of funding can be accessed including, for example, realised capital receipts, sustainable prudential borrowing funded by recurring revenue savings, or external grant Item 4 Page 41 of 118
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PUBLIC funding. The £569m General Capital Grant for Scotland includes £120m that has not yet been distributed. This includes Flood Prevention (£53m), and Active Travel funding (£40m). 1.4. Also within the undistributed sum mentioned above is £20m of non-recurring capital grant related to the Climate Emergency. The Council received £1.167m in 2025/26 from a funding pot of £40m, and a range of projects were developed to support the Council’s journey towards Net Zero by 2030. The Council’s share of 2026/27 funding has yet to be confirmed. 1.5. There is likely to be limited opportunity for generating capital receipts from sales as a source of income to the capital plan; consequently there will be a greater reliance on borrowing as the main source of capital funding outwith the capital grant settlement. Increased borrowing, however, will result in revenue pressures at a time when the revenue fund is also severely constrained. 1.6. It should be noted that the capital plan outlined in this report extends beyond 2026/27, yet no capital grant beyond 2026/27 has been confirmed; therefore, an estimated annual general capital grant level of £12.000m has been assumed for future years. This forecast is consistent with the level of capital spend outlined in the Scottish Government Spending Review 2026, which suggests capital spending will remain flat in cash terms over the next 5 years. Approved programmes already in place that are funded by other arrangements, e.g. prudential borrowing or specific funding related to the City Deal, are also included. It should be further noted that this approach does not preclude the Council from taking further investment decisions as part of the budget process, where separate funding arrangements are established. 1.7. The Prudential Code and Treasury Management Code both play a key role in capital finance within local authorities; they require the Council to set Prudential and Treasury Management indicators for the following three years to ensure that the Council’s capital investment plans are affordable, prudent and sustainable. The Treasury Management Code further requires the Council to approve, annually in advance, a strategy for its treasury management activities, while the Prudential Code also requires full Council approval of the Capital Strategy, setting out the long-term context within which capital investment decisions are made to improve capital, revenue and balance sheet planning. 1.8. Details of the proposed Prudential Indicators and Treasury Management Strategy are attached at Appendix 3; and the proposed Capital Strategy is attached at Appendix 4. __________________________________________________________________ Page 42 of 118
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PUBLIC 2. Recommendations 2.1 It is recommended that Council: (a) Approves the Capital Investment Programme covering the period up to 2030/31, as summarised in Table 2 of this report and detailed in Appendices 1 and 2 attached; (b) Notes the level of capital grant available in 2026/27 and also that estimates of general and specific grant have been included within the planned programme beyond this financial year, in the absence of formal confirmation; (c) Delegates authority to the relevant Heads of Service in consultation with the Director of Finance and Resources to adjust, where appropriate, resources across individual components of the lifecycle maintenance, cultural infrastructure, roads and structures, and schools investment programmes respectively; (d) Approves the Prudential Indicators set out in Appendix 3 to this report, subject to any required adjustments arising from decisions taken by the Council in relation to the capital and revenue budget reports being presented to this Council meeting; (e) Approves the Treasury Management Strategy Statement 2026/27, including the Treasury Management Indicators, set out in Appendix 3 to this report; and (f) Approves the Capital Strategy set out in Appendix 4 to this report. 3. Overview of Capital Resources and Proposed Programme 3.1 The update to the capital programme outlined in this report focuses on the 2026/27 financial year and includes: • Confirmation of the roll forward of projects already approved as part of the existing Capital Investment Plan, including major projects already underway as part of the existing investment programme; • Council has approved a Learning Estate Strategy which will inform the next phase of the school estate investment plan and longer term strategic estate requirements, based on updated condition survey work which has been undertaken over recent months. In February 2025, Council committed to set aside, over a number of years, sufficient revenue funding to support borrowing for a £170m programme; • In line with the Council’s agreed medium-term financial planning principles, the General Capital Grant for 2026/27 is directed firstly to maintain the delivery of the Council’s rolling lifecycle maintenance programmes across the Council’s key asset classes as follows: Page 43 of 118
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PUBLIC o lifecycle maintenance programme for the Council’s property portfolio (£1.500m); o maintaining an annual replacement programme for the Council’s vehicle fleet (£2.100m); o maintenance programmes for the Council’s bridges and streetlighting/traffic lights (£0.856m), and transport infrastructure covering roads & footpaths (£4.000m) – this allocation will increase upon distribution of Active Travel funding (see 4.3); o maintenance and refresh of the Council’s ICT estate (£01.200m) and Schools & Early Years ICT equipment and infrastructure (£1.300m); o maintaining delivery of the Private Sector Housing programme (£0.750m). 3.2 Table 1 and Table 2 below provide a high level summary of the current resources and investment programmes over this period with full details outlined in Appendices 1 and 2. Table 1: Resource Availability 2026/27 - 2030/31 2026/27 2027/28 2028/29 Years 4-10 Total £000s £000s £000s £000s £000s Prudential Borrowing 30,961 20,302 13,163 178,932 243,357 Total Borrowing 30,961 20,302 13,163 178,932 243,357 General Capital Grant 11,706 12,000 12,000 84,000 119,706 BAE contribution (Park Mains) 0 18,000 0 0 18,000 Usable Capital Receipts (previously committed) 19,455 6,637 375 375 26,842 Capital Funded from Current Revenue (CFCR) 44,826 9,549 9,098 23,079 86,553 Total Resource Availability 106,948 66,488 34,636 286,386 494,458 Page 44 of 118
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PUBLIC Table 2: Programme 2026/27 - 2030/31 2026/27 2027/28 2028/29 Years 4-10 Total £000s £000s £000s £000s £000s Major Programmes Schools Estate Programme 49,906 29,835 10,000 173,418 263,159 Schools Transformation & ICT 1,200 1,500 1,000 4,600 8,300 Lagoon Internal Play Centre 500 0 0 0 500 Community Halls Refurbishment 680 0 0 0 680 City Deal Projects 2,140 0 0 0 2,140 AMIDS South 24,581 14,659 3,443 0 42,683 Paisley Museum 4,359 0 0 0 4,359 Town Centre Regeneration 2,300 0 0 0 2,300 Place Based Fund 723 0 0 0 723 Asset Lifecycle Maintenance Programmes General ICT Replacement 1,000 1,000 850 5,300 8,150 Buildings Capital Lifecycle 4,650 4,000 3,883 22,100 34,633 Traffic Management 226 0 0 0 226 Private Sector Housing Grant 750 750 750 5,250 7,500 Vehicle Replacement 2,565 2,325 2,310 15,120 22,320 Roads & Footpaths 9,605 11,224 11,500 54,298 86,627 Climate Projects 292 0 0 0 292 Bridges 300 300 300 2,100 3,000 Artificial Pitch Upgrade 615 0 0 0 615 Lighting Columns and traffic signals 556 600 600 4,200 5,956 Public Realm - Abbey 0 295 0 0 295 Total Planned Spend 106,948 66,488 34,636 286,386 494,458 Page 45 of 118
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PUBLIC Table 3: Capital Investment 2026/27 to 2035/36 by Council Plan Theme Planned Capital Spend 2026 to 2036 by Council Plan Theme £000s Improving Outcomes for Children and Families 271,459 Place: Working together to enhance wellbeing across communities 167,939 Economy: Building an inclusive, green, and resilient economy 44,823 Living our Values: Making a difference together 8,150 Fair: Nurturing bright, happy, and healthy futures for all 1,795 Green: Leading Renfrewshire to Net Zero 292 494,458 4. Major Investment Programmes 4.1 The Council has been undertaking an ambitious programme of investment in its cultural and heritage assets. Following the completion of Paisley Town Hall, Paisley Arts Centre and the new Cultural and Learning Hub, the remaining element of this programme is the ambitious Paisley Museum Reimagined project, which is forecast to be completed during 2026/27. 4.3 In setting the 2025/26 revenue budget, the Council committed funds towards a £90m strategic investment roads and associated infrastructure over a 10-year period. This is to be funded through a combination of capital grants, CFCR and borrowing and is fully reflected in Appendix 2. Part of the funding package related to the Cycling, Walking and Safer Streets grant, which is now un- ringfenced and rolled into Active Travel within the General Capital Grant (currently undistributed). Once this distribution is confirmed, £0.800m per annum will require to be earmarked internally for this purpose. 4.4 At the same time, the Council committed to setting aside revenue contributions to funding and borrowing in order to invest up to £170m in the approved 20-year Learning Estate Strategy, over and above the provision already approved (Paisley Grammar Campus, Thistle Primary, Thorn Primary, and Park Mains High School extension). Since that decision, the Council has halted plans for Thorn Primary as a standalone project, instead subsuming it into plans for the wider Johnstone Learning Estate, which is still in development. Its funding has therefore been reprofiled to later years. Following the publication of the draft Scottish Budget and Spending Review on 13 January 2026, there is currently no confirmed successor programme to the current Learning Estate Improvement Programme, which is now closed for applications. 4.5 As a result of these long-term commitments, the General Services Capital Investment Plan is presented as a 10-year plan, with the first three years of this period profiled for estimated spend. Page 46 of 118
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PUBLIC 5. Lifecycle Maintenance of Existing Assets 5.1 The Council has committed to a financial planning principle that capital grant resources are directed in the first instance to support lifecycle maintenance programmes to protect the Council’s existing assets and infrastructure. Annual lifecycle investment across the Council’s key asset classes during 2026/27 is included within the capital programme detailed in Appendix 2. Property Lifecycle Maintenance 5.2 The Council’s property portfolio was predominantly built prior to statutory and Health & Safety legislation and guidance, and as such the current identified priorities focus primarily on undertaking investment to improve health and safety standards, compliance with statutory duties and improving energy efficiency across the property portfolio. The Council has a Corporate Asset Strategy, which sets out its priorities. The most recent plan was approved at Leadership Board on 18 February 2026 and can be found here. 5.3 The amount of funding available to undertake component replacement and major maintenance remains very constrained and it is increasingly difficult to maintain the condition of the current estate. The plan is further constrained by the scheduling of works for some public buildings (e.g. schools), along with the availability of contractors. 5.4 It is recognised that a sufficient degree of flexibility in the management of the lifecycle maintenance fund is required to address changing priorities that may emerge. It is therefore proposed that the Head of Facilities and Property Services, in consultation with the Director of Finance and Resources, is delegated authority to adjust the allocation of resources within this proposed programme, with appropriate reporting to the Finance and Resources Policy Board. There is a carry forward of prior year funding as well as an allocation of £1.500m of General Capital Grant reflected in the 2026/27 budget. Roads and Footpaths 5.5 In line with the Council decision in setting the 2025/26 budget to agree a 10- year roads investment programme, this report allocates £4.000m of General Capital Grant to Roads and Footways in 2026/27 and, similar to property lifecycle maintenance, it is proposed that the Head of Climate, Public Protection and Roads, in consultation with the Director of Finance and Resources, is delegated authority to adjust the allocation of resources within this programme. Further significant investment for future years, as noted above, is reflected in Appendix 2. Streetlighting, Bridges and Other Road Structures 5.6 In order to maintain the overall condition of street lighting columns, bridges and structures, an allocation of £0.856m of General Capital Grant for the rolling replacement programme is proposed for 2026/27. Page 47 of 118
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PUBLIC Vehicle and Plant Replacement Strategy 5.7 The Council has invested significant capital resources in recent years to support a vehicle replacement strategy. Continued investment is required in order to sustain planned vehicle replacement cycles and maintain the ability of the existing vehicle and plant fleet to meet the needs of services and mitigate against increased revenue pressures arising from additional maintenance and temporary hire costs due to increased vehicle failure rates. This includes a full review of the Building Services fleet. It is proposed that £2.100m of the General Capital Grant is allocated for this purpose in 2026/27. Private Sector Housing Grant (PSHG) 5.8 The PSHG is utilised to support a range of support programmes for private sector housing owners and is funded through a mix of revenue and capital funding. A priority component of this programme has been to support owner occupiers in meeting the costs of common works being delivered in mixed tenure blocks. This is a key enabler with regards the implementation of the housing regeneration programme. It is proposed that £0.750m of the General Capital Grant is allocated for this purpose in 2026/27. 6. Prudential Framework for Capital Finance and Treasury Management Strategy Statement 2026/27 6.1 The Local Government in Scotland Act 2003 and supporting regulations require local authorities to have regard to the following codes of practice issued by the Chartered Institute of Public Finance and Accountancy (CIPFA): • The Prudential Code for Capital Finance in Local Authorities (“the Prudential Code”); • Treasury Management in the Public Services Code of Practice and Cross-Sectoral Guidance Notes (“the Treasury Management Code”). 6.2 The Prudential Code and Treasury Management Code play a key role in capital finance in local authorities. Local authorities determine their own programmes for capital investment in assets that are central to the delivery of services. The Prudential Code and Treasury Management Code were developed to support local authorities in taking decisions relevant to their capital investment plans. 6.3 Their key objectives are to ensure that: • capital expenditure plans and investment plans are affordable and proportionate; • all external borrowing and other long-term liabilities are within prudent and sustainable levels; • the risks associated with investments for commercial purposes are proportionate to their financial capacity; and Page 48 of 118
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PUBLIC • treasury management decisions are taken in accordance with good professional practice. 6.4 The Prudential Code and the Treasury Management Code require the Council to set prudential and treasury management indicators for the following three years to ensure that the Council’s capital investment plans are affordable, proportionate, prudent and sustainable. 6.5 In addition, the Treasury Management Code further requires the Council to approve, annually in advance, a strategy for its treasury management activities. This strategy sets out the Council’s policies and plans for the year ahead in relation to the management of cashflows, money market and capital market transactions (including borrowing and investing), the effective control of the risks associated with those activities and the pursuit of optimum performance consistent with those risks. 6.6 Attached at Appendix 3 to this report are full details of the Council’s Prudential Indicators and Treasury Management Strategy Statement for 2026/27, based on the details outlined in this report. 7. Capital Strategy 7.1 The Capital Strategy provides an overview of how capital expenditure, capital financing, and treasury management activities contribute to the provision of public services in local government, along with an overview of how associated risk is managed, and implications for future financial sustainability. 7.2 Development, and full Council approval, of the Capital Strategy is a requirement of the Prudential Code, with the intention that the strategy sets out the long-term context within which capital investment decisions are made, and to improve capital, revenue and balance sheet planning. 7.3 The Capital Strategy is attached at Appendix 4 to this report. 8. Equalities 8.1 Where the Council is making decisions in relation to its spending priorities, it is obliged to comply with the public sector equality duty set out in the Equalities Act 2010. This means that the Council must have due regard to the need to: • Eliminate unlawful discrimination, harassment and victimisation and other prohibited conduct; • Advance equality of opportunity between people who share a relevant characteristic and those who do not; and • Foster good relations between people who share a protected characteristic and those who do not. Page 49 of 118
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PUBLIC 8.2 To meet this requirement, where necessary the Council must assess the impact of applying a new policy or decision against these three needs, and at the point of decision-making, elected members must have sufficient information available to assess that impact. Members, in considering their capital investment proposals prior to presentation at the Council meeting, are therefore encouraged to seek advice from Directors on the equality implications of each proposal. ___________________________________________________________________ Implications of the Report 1. Financial: the Capital Plan outlines the planned investments in Council assets over a 10-year period; along with associated funding sources. The Capital Plan, Prudential Framework, Treasury Management Strategy and Capital Strategy ensure that investment in council assets is undertaken in a prudent and financially sustainable manner, is consistent with the Council’s priorities and agreed financial planning principles, and is affordable for the Council now and in future years. The General Capital Grant confirmed for 2026/27 is £11.706m. 2. HR & Organisational Development: none arising directly from this report. 3. Community/Council Planning: the investments outlined in these reports contribute to all strategic themes within the Council Plan objectives; their delivery will ensure that the Council’s assets and infrastructure are fit for purpose and provide the people of Renfrewshire with access to facilities that improve their environment and opportunities, while ensuring the Council is financially sustainable by applying prudential rules. 4. Legal: the Local Government in Scotland Act 2003 and supporting regulations require local authorities to have regard to the Prudential Code for Capital Finance in Local Authorities, and the Treasury Management in the Public Services Code of Practice and Cross-Sectoral Guidance Notes, both issued by the Chartered Institute of Public Finance and Accountancy. 5. Property/Assets: the Capital Plan outlines significant investment in Council assets and infrastructure over the medium to long term, in order to ensure as far as possible within the resources available they remain fit for purpose and support efficient service delivery. 6. Information Technology: the Capital Plan outlines investment in ICT assets that will ensure the Council continues to have access to secure, efficient ICT services. 7. Equality & Human Rights: where the Council is making decisions in relation to its spending priorities, it is obliged to comply with the public sector equality duty set out in the Equalities Act 2010. Page 50 of 118
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PUBLIC 8. Health & Safety: the Capital Plan outlines investment in Council assets and facilities to ensure they remain safe and accessible in line with statutory obligations. 9. Procurement: the Capital Plan outlines significant investment in Council assets which will conform to all relevant contract standing orders and procurement legislation. 10. Risk: investment in Council assets ensures they remain fit for purpose and meet all statutory requirements in terms of accessibility, sustainability and safety. 11. Privacy Impact: none arising directly from this report. 12. Cosla Policy Position: none arising directly from this report. 13. Children’s Rights: none arising directly from this report. 14. Climate Risk: investment in Council assets improves energy efficiency, reducing the Council’s carbon footprint and helping it achieve its Net Zero by 2030 target. _____________________________________________________________ Author: Alastair MacArthur, Director of Finance & Resources List of Appendices to this report: Appendix 1 Summary of Capital Income and Expenditure 2026/27 to 2030/31 Appendix 2 Capital Investment Programme 2026/27 to 2030/31 Appendix 3 Prudential Framework and Treasury Management Strategy Statement 2026/27 Appendix 4 Capital Strategy 2026/27 to 2028/29 Page 51 of 118
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PUBLIC Appendix 1 2026/27 – 2035/36 Capital Investment Programme (NB: 2026/27 includes some carried forward budgets from earlier years). General Services Capital Programme 2026/27 2027/28 2028/29 Years 4-10 Total £000s £000s £000s £000s £000s Schools and Early Years Investment 51,106 31,335 11,000 178,018 271,459 Leisure Estate 1,180 0 0 0 1,180 Environment and Infrastructure 13,252 14,744 14,710 75,718 118,424 Climate and Planning 292 0 0 0 292 Economy and Regeneration 7,382 0 0 0 7,382 City Deal 26,721 14,659 3,443 0 44,823 Corporate Projects 6,265 5,000 4,733 27,400 43,398 Private Sector Housing Grant 750 750 750 5,250 7,500 Total General Services Programme 106,948 66,488 34,636 286,386 494,458 Capital Resources £000s £000s £000s £000s £000s Prudential Borrowing 30,961 20,302 13,163 178,932 243,357 Total Borrowing 30,961 20,302 13,163 178,932 243,357 General Capital Grant 11,706 12,000 12,000 84,000 119,706 BAE contribution (Park Mains) 0 18,000 0 0 18,000 Usable Capital Receipts - Committed 19,455 6,637 375 375 26,842 Capital Funded from Current Revenue (CFCR) 44,826 9,549 9,098 23,079 86,553 Total Resource Availability 106,948 66,488 34,636 286,386 494,458 Page 53 of 118
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PUBLIC Appendix 2 2026/27 – 2035/36 Capital Investment Programme by Project Schools and Early Years Investment 2026/27 2027/28 2028/29 Years 4-10 Total £000s £000s £000s £000s £000s Paisley Grammar New Campus 9,019 0 0 0 9,019 Thistle New Build 25,375 10,875 0 0 36,250 Learning Estate Strategy 0 0 10,000 173,418 183,418 Park Mains Extension 15,512 18,960 0 0 34,472 Total Schools Investment Programme 49,906 29,835 10,000 173,418 263,159 Technology Replacement Programme 1,200 1,500 1,000 4,600 8,300 Total 51,106 31,335 11,000 178,018 271,459 Leisure Estate 2026/27 2027/28 2028/29 Years 4-10 Total £000s £000s £000s £000s £000s Lagoon Internal Play Centre 500 0 0 0 500 Community Halls Refurbishment 680 0 0 0 680 Total 1,180 0 0 0 1,180 Climate and Planning 2026/27 2027/28 2028/29 Years 4-10 Total £000s £000s £000s £000s £000s Climate Projects 292 0 0 0 292 Total 292 0 0 0 292 Page 54 of 118
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PUBLIC Environment and Infrastructure 2026/27 2027/28 2028/29 Years 4-10 Total £000s £000s £000s £000s £000s Asset Lifecycle Maintenance Programmes Vehicle Replacement Programme 2,565 2,325 2,310 15,120 22,320 Bridge Assessment/Strengthening 300 300 300 2,100 3,000 Roads/Footways Upgrade Programme 9,605 11,224 11,500 54,298 86,627 Lighting Columns Replacement 556 600 600 4,200 5,956 Traffic Management 226 0 0 0 226 Other Major Programmes Public Realm - Abbey 0 295 0 0 295 Total 13,252 14,744 14,710 75,718 118,424 Economy and Regeneration 2026/27 2027/28 2028/29 Years 4-10 Total £000s £000s £000s £000s £000s Paisley Venue and Town Centre Infrastructure Paisley Museum 4,359 0 0 0 4,359 Town Centre Regeneration 2,300 0 0 0 2,300 Place Based Fund 723 0 0 0 723 Total 7,382 0 0 0 7,382 Page 55 of 118
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PUBLIC City Deal 2026/27 2027/28 2028/29 Years 4-10 Total £000s £000s £000s £000s £000s City Deal Glasgow Airport Investment Area 2,000 0 0 0 2,000 Clyde Waterfront & Renfrew Riverside 140 0 0 0 140 Total City Deal 2,140 0 0 0 2,140 City Deal Related Programmes AMIDS South 24,581 14,659 3,443 0 42,683 Total 26,721 14,659 3,443 0 44,823 Corporate Projects 2026/27 2027/28 2028/29 Years 4-10 Total £000s £000s £000s £000s £000s ICT Programme ICT Infrastructure Maintenance and Renewal Programme 1,000 1,000 850 5,300 8,150 Other Corporate Programmes Lifecycle Capital Maintenance (LCM) Fund 4,650 4,000 3,883 22,100 34,633 Artificial Pitch Upgrades 615 0 0 0 615 Total 6,265 5,000 4,733 27,400 43,398 Page 56 of 118
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PUBLIC APPENDIX 3 - Prudential Framework for Capital Finance 2026 to 2029 and Treasury Management Strategy Statement 2026/27 1. Summary 1.1 The Local Government in Scotland Act 2003 and supporting regulations require local authorities to have regard to the following codes of practice issued by the Chartered Institute of Public Finance and Accountancy (CIPFA): • The Prudential Code for Capital Finance in Local Authorities (“the Prudential Code”); • Treasury Management in the Public Services: Code of Practice and Cross-Sectoral Guidance Notes (“the Treasury Management Code”). 1.2 The Prudential Code and the Treasury Management Code require the Council to set prudential and treasury management indicators for the following three years to ensure that the Council’s capital investment plans are affordable, prudent and sustainable. 1.3 The Treasury Management Code further requires the Council to approve, annually in advance, a strategy for its treasury management activities. This strategy (from section 8 onwards) sets out the Council’s policies and plans for the year ahead in relation to the management of cashflows; money market and capital market transactions, including borrowing and investing; the effective control of the risks associated with those activities; and the pursuit of optimum performance consistent with those risks. 1.4 CIPFA published updated Prudential and Treasury Management Codes on 20 December 2021 which have been fully implemented by the Council. 1.5 In August 2025, CIPFA announced a review of both Codes to ensure that they remain fit for purpose and that the changes introduced in 2021 have been implemented as intended. The first of two consultations was published by CIPFA at the end of 2025, seeking views, on a principles basis, on areas where the Codes could be strengthened or amended. More detail on proposed changes will follow in the second consultation, expected before the end of 2026. 2. Prudential framework for capital finance: Purpose, governance and affordability considerations 2.1 The Prudential Code plays a key role in capital finance in local authorities, who determine their own programmes for capital investment in fixed assets. The Prudential Code was developed by the Chartered Institute of Public Finance and Accountancy (CIPFA) as a professional code of practice to support local authorities in taking decisions relevant to their capital investment plans. 2.2 The key objectives of the Prudential Code are to ensure that: • capital investment plans are affordable and proportionate; Page 57 of 118
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PUBLIC • all external borrowing and other long-term liabilities are within prudent and sustainable levels; • the risks associated with investments for service and commercial purposes are proportionate to their financial capacity; • treasury management and other investment decisions are taken in accordance with professional good practice; and • the Council is accountable, by providing a clear and transparent framework. 2.3 To demonstrate that local authorities have fulfilled these objectives, the Prudential Code sets out key indicators that must be used and the factors that must be taken into account. The Prudential Code does not suggest indicative limits or ratios; these are for the Council to set itself. 2.4 The indicators required by the Prudential Code are designed to support and record local decision-making. They are not designed to be comparative performance indicators, and the use of them in this way would be likely to be misleading. In particular, local authorities have widely different debt positions and these differences are likely to increase over time as the result of local decisions. The system is specifically designed to support such local decision-making in a manner that is publicly accountable. 2.5 The Prudential Code sets out a clear governance procedure for the setting and revising of prudential indicators. This will be done by the same body that takes the decisions for the Council’s budget, i.e. full Council. The Chief Finance Officer is responsible for ensuring that all matters required to be taken into account are reported to the decision- making body for consideration and for establishing procedures to monitor performance. 2.6 Prudential indicators for previous years are taken directly from the Council’s Annual Accounts. If any item within the Accounts that is relied upon for a prudential indicator is the subject of audit qualification, this must be highlighted when the prudential indicators are set out or revised. No such qualification has been stated. 2.7 The Local Government in Scotland Act 2003 refers to affordability. The Council must consider the affordability of its capital investment during all the years in which it will have a financial impact on the Council. In doing so, the Council needs to pay due regard to risk and uncertainty. Risk analysis and risk management strategies should be taken into account. The Prudential Code also requires local authorities to have regard to wider management processes (option appraisal, asset management planning, strategic planning and achievability) in accordance with good professional practice. 2.8 The fundamental objective in the consideration of the affordability of the Council’s capital plans is to ensure that the total capital investment of the Council remains within sustainable limits, and in particular to consider its impact on the Revenue budget of the Council. Affordability is ultimately determined by judgement about acceptable levels of Council Tax or, in the case of the Housing Revenue Account, acceptable rent levels. Page 58 of 118
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PUBLIC 2.9 In considering the affordability of its capital plans, the Council is required to consider all of the resources currently available to it and those expected in future years, together with the totality of its capital plans, revenue income and revenue expenditure forecasts for the forthcoming years. The Council is also required to consider known significant variations beyond this timeframe. This requires the development of a three-year revenue forecast, and a rolling five-year capital investment plan. 2.10 Prudential indicators in respect of external debt must be set and revised taking into account their affordability. It is through this means that the objectives of sustainability and prudence are addressed year-on-year. 2.11 It is also prudent that treasury management is carried out in accordance with good professional practice. The Prudential Code requires compliance with the Treasury Management Code. 2.12 A soundly formulated capital programme must be driven by the desire to provide high quality, value-for-money public services. The Prudential Code recognises that in making its capital investment decisions the Council must have explicit regard to option appraisal, asset management planning, strategic planning for the Council and achievability of the forward plan. 2.13 The Prudential Code does not specify how the Council should have regard to these factors; they all represent elements of good practice for which guidance has already been provided by CIPFA and other authoritative sources. The Prudential Code instead concentrates on the means by which the Council should demonstrate that its proposals are affordable, prudent and sustainable. 2.14 The Prudential Code promotes transparency in decision-making by using information contained within the Council’s Annual Accounts and by having definitions for prudential indicators that are consistent with the definitions used within the Accounts. 3. Prudential framework for capital finance: Prudential indicators for capital expenditure 3.1 Capital expenditure Capital expenditure is defined in the CIPFA Code of Practice on Local Authority Accounting in the United Kingdom 2026/27 and must be consistent with financial reporting standards for accounting purposes. In addition, under the Local Government in Scotland Act 2003, local authorities have a duty to observe proper accounting practices. 3.2 Under section 35(1) of the Local Government in Scotland Act 2003, it is the duty of the Council to determine and keep under review the maximum amount it can afford to allocate to capital expenditure. 3.3 The Council is required to make estimates of the capital expenditure it plans to incur for the forthcoming financial year and at least the following two years, and to keep these Page 59 of 118
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PUBLIC estimates under review. Separate estimates should be made for the Housing Revenue Account (“Housing”) and for General Fund (“Non-housing”) services. Details of the planned investment programmes for Housing and Non-housing services are presented in this report and take account of the capital resources that will be made available to the Council from the Scottish Government through the local government settlement 2026/27. 3.4 In addition to the approved capital investment plans, there may be projects that emerge throughout the year that can take advantage of the opportunities arising from the flexibility offered by the Prudential Code, and as a consequence the capital expenditure totals may change. Any required changes to the prudential indicators arising from new projects will be considered as part of regular reports presented to Policy Boards or to the Council. It is recommended that the Council approves the following as the indicator for capital expenditure for the next three financial years: Estimated Capital Expenditure 2025/26 2026/27 2027/28 £000s £000s £000s Non-Housing 106,948 66,488 34,636 Housing 40,808 55,131 73,804 Total Resource Availability 147,756 121,619 108,440 3.5 The capital investment plans are to be funded from various sources, such as general and specific capital grants, contributions from revenue resources and secured capital receipts, as well as long-term borrowing. Owing to risks inherent in the disposal of surplus land, and in line with practice adopted in previous years, there is no reliance on the funding of the capital investment plans from unrealised capital receipts. 3.6 After the year-end, the actual capital expenditure incurred during the financial year will be reported for Housing and for Non-housing. These figures will be included in the Council’s Annual Accounts, along with explanations of significant variations from expectations. The actual capital expenditure incurred in 2024/25 was £120.105m. 3.7 Capital Financing Requirement (CFR) Local authorities have access to a number of ways of financing traditionally procured capital investment. This does not refer to the payment of cash, but the funding sources that are applied to ensure that the underlying amount arising from capital plans is absolutely in place, whether at the point of spend or over the longer term. Some available financing options involve resourcing the investment at the time that it is incurred. These are: • the application of usable capital receipts; • a direct charge to the revenue budget; • the application of capital grants; • up-front contributions from project partners. Page 60 of 118
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PUBLIC 3.8 Capital expenditure that is not financed by one of the above methods will increase what is known as the Capital Financing Requirement (CFR) of the Council. It has often been referred to as capital expenditure financed by borrowing; however this is incorrect, as borrowing provides cash, not the asset, since borrowing has to be repaid. Also, the term borrowing in this context does not necessarily imply external debt since, in accordance with best professional practice, the Council has an integrated Treasury Management Strategy and therefore does not associate borrowing with particular items or types of expenditure. The Council will at any point in time have a number of cashflows, both positive and negative, and will be managing its position in terms of its borrowing and investments in accordance with its Treasury Management Strategy. 3.9 In measuring external debt, as detailed in section 4, the Prudential Code encompasses all borrowing, whether for a capital or for a revenue purpose. In day-to-day cash management, no distinction is made between ‘revenue cash’ and ‘capital cash’. External borrowing arises as a consequence of all financial transactions of the Council and not simply those arising from capital spending. In contrast, the CFR reflects the Council’s underlying need to borrow for a capital purpose. 3.10 The Council is required to make reasonable estimates of its CFR at the end of the forthcoming financial year and the two subsequent years, showing figures for Housing and Non-housing separately, and keep this under review. 3.11 The CFR will increase whenever capital expenditure is incurred. If this capital expenditure is resourced immediately, through usable capital receipts, direct financing from revenue or application of capital grants/contributions, then the CFR will reduce at the same time that the capital expenditure is incurred, resulting in no net increase to the CFR. The CFR also will be reduced by charges to the revenue account in respect of past capital expenditure, or where the Council may initiate voluntary early charges to revenue as part of longer term financial planning decisions. 3.12 Where capital expenditure is not resourced immediately, this will result in a net increase to the CFR that represents an increase in the underlying need to borrow for a capital purpose. This will be the case whether or not external borrowing actually occurs. 3.13 It is recommended that the Council approves the following as the indicator for the CFR at the end of each of the next three financial years: 3.14 After the year-end, the actual CFR as at 31 March will be calculated for Housing and for Non-housing and these figures will be included in the Council’s Annual Accounts, Capital Financing Requirement 2026/27 2027/28 2028/29 £m £m £m Non-Housing 539.014 552.307 552.547 Housing 182.850 230.493 286.326 Total 721.864 782.800 838.873 Page 61 of 118
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PUBLIC with explanations for significant variations from expectations. At 31 March 2025 the Capital Financing Requirement was £599.561m. 3.15 Statutory repayment of loans fund advances The Council is required to set out its policy for the statutory repayment of loans fund advances prior to the start of the financial year. This ensures that the Council makes a prudent annual provision to pay off an element of loans fund advances accumulated from previous financial years. For all new loans fund advances, the policy for repayment is as follows. Asset Life Method: Loans fund advances are repaid with reference to the life of an asset, using an average life of 40 years for General Fund assets and 30 years for HRA assets. There are exceptions to this, such as assets constructed under City Deal arrangements, which have differing asset lives, and loans fund repayments are therefore proposed over 50- 60 years for those. The annuity rate applied to current loans fund repayments has also been revised and is based on an annuity rate of 6.00% and similar average life periods to those referred to above. This is considered to be a prudent approach to ensure the loans fund repayments continue for a period that is reasonably in line with that over which the asset provides benefits to the Council. 4. Prudential framework for capital finance: Prudential indicators for external debt 4.1 External debt is referred to as the sum of external borrowing and other long-term liabilities, such as finance leases. The prudential indicators for external debt must be set and revised taking into account their affordability. It is through this means that that the objective of ensuring that external debt is kept within sustainable prudent limits is addressed year on year. 4.2 External debt indicators are at two levels: an Operational Boundary and an Authorised Limit. Both of these must be consistent with the Council’s plans for capital expenditure and financing and with its Treasury Management Statement and Practices. 4.3 Operational Boundary This is the focus of day-to-day treasury management activity within the Council and is an estimate of the most likely, but not worst case, scenario in terms of cashflow. Risk analysis and risk management strategies are taken into account, as are plans for capital expenditure, estimates of the CFR and estimates of cashflow requirements for all purposes. It is possible that this boundary could be breached occasionally and this should not be regarded as significant. However, a sustained or regular trend of such would be significant and require investigation and action. Page 62 of 118
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PUBLIC 4.4 The Council is required to set for the forthcoming financial year and the following two years an Operational Boundary for its total external debt (gross of investments), identifying separately borrowing from other long-term liabilities. It is recommended that the Council approves the following as the indicator for the Operational Boundary over the three-year period 2026/27 through 2028/29: Operational Boundary 2026/27 2027/28 2028/29 £m £m £m Borrowing 600.644 664.687 724.183 Other long-term liabilities 121.220 118.113 114.690 Total 721.864 782.800 838.873 4.5 Authorised Limit This is based on the same assumptions as the Operational Boundary, with sufficient headroom to allow for unusual or exceptional cash movements. This headroom ensures sufficient capacity to allow for cashflow management without breaching the limit. 4.6 The Authorised Limit will be reviewed on an annual basis and any changes require to be approved by Council. 4.7 The Council is required to set for the next three financial years an authorised limit for its total external debt (gross of investments), identifying separately any borrowing from other long-term liabilities. It is recommended that the Council approves the following as the indicator for the authorised limit over the three-year period 2026/27 to 2028/29: 4.8 After the year-end, the balance of actual external debt as at 31 March will be calculated and reported to Council, with borrowing and other long-term liabilities being shown separately. 4.9 The Council’s actual external debt at 31 March 2025 was £411m of which £284m related to borrowing and £127m to outstanding obligations on finance leases and guarantees. 4.10 The actual external debt is not directly comparable to the Authorised Limit nor to the Operational Boundary since the actual external debt reflects the position at a point in time. In addition, the indicators are set based on the Council’s potential external borrowing requirements for capital investment purposes. However, as part of the ongoing Treasury Management Strategy, the Council may utilise internal borrowing where it is deemed appropriate to avoid unnecessary exposure to interest rate risk. Authorised Limit 2026/27 2027/28 2028/29 £m £m £m Borrowing 630.676 697.920 760.392 Other long-term liabilities 121.220 118.113 114.690 Total 751.896 816.033 875.082 Page 63 of 118
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PUBLIC The adoption of this strategy results in the Council’s net external borrowing being lower than the CFR. The projected external debt compared to the estimated CFR for the three-year period 2026/27 through 2028/29 is detailed at section 10.4. 5. Prudential framework for capital finance: Prudential indicator for treasury management 5.1 The prudential indicator in respect of treasury management is that the Council has adopted the CIPFA Treasury Management in the Public Services: Code of Practice and Cross-Sectoral Guidance Notes (“the Treasury Management Code”). This requires that the annual Treasury Management Strategy Statement is approved by Council, along with treasury limits for the three-year period 2026/27 to 2028/29. 5.2 In adopting the Treasury Management Code, the aim is to ensure that treasury management is driven by a clear and integrated Treasury Management Strategy and a recognition of the existing structure of the Council’s borrowing and investment portfolios. The primary policy objectives of the Council’s investment activities are the security and liquidity of funds, and the avoidance of exposure of public funds to unnecessary or unquantified risk. The Council should consider the return on its investments; however, this should not be at the expense of security and liquidity. It is therefore important that the Council adopts an appropriate approach to risk management with regard to its investment activities. 5.3 Borrowing more than, or in advance of, the Council’s need purely to profit from the investment of the extra sums borrowed should not be undertaken. In those circumstances where borrowing is taken in advance of need, the security of such funds must be ensured and consideration should be given as to whether value-for-money can be demonstrated. These principles should be borne in mind when investments are made, particularly for the medium to long term. 5.4 The Treasury Management Code requires that the Council approves, annually in advance, a strategy for its treasury management activities. The Treasury Management Strategy for 2026/27 is set out in this report from section 8 onward. 6. Prudential framework for capital finance: Prudential indicators for prudence 6.1 It is possible that, while a council’s financial strategy may be affordable in the short term, it is imprudent and unsustainable in the medium term because it would, if pursued, be dependent on the use of borrowing to fund revenue expenditure. For this reason the Prudential Code makes it necessary, if a financial strategy is to be prudent, that it is one in which medium-term net borrowing is only to be used for capital purposes. 6.2 In the Prudential Code, this requirement must be demonstrated through a comparison of net borrowing with the CFR. Except in the short term, net external borrowing should Page 64 of 118
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PUBLIC not exceed the total CFR in the previous year, plus the estimate of any additional CFRs for the current and next two financial years. 6.3 The projected CFR at 31 March 2029 is £839m (section 3.13). Net external borrowing should not exceed this level and the projected Operational Boundary at 31 March 2029 is £839m (section 4.4). The Council had no difficulty in meeting this requirement at 31 March 2025 and no difficulties are anticipated in meeting it in the future. 6.4 In addition, ensuring that treasury management is carried out in accordance with good professional practice is an essential feature of prudence. The treasury management indicators required by the Treasury Management Code are designed to help demonstrate prudence. The prudential indicator is that the Council has adopted CIPFA’s Treasury Management Code. 7. Prudential framework for capital finance: Prudential indicators for affordability 7.1 A key measure of affordability is the incremental impact of investment decisions on Council Tax or housing rents. Estimates of the ratio of financing costs to net revenue stream provide an indication of how much of the Council’s revenue budget is committed to the repayment of debt. The estimated ratios for the next three financial years are: Non-housing estimates for 2027 to 2029 are currently based on the 2026/27 settlement figures because the current spending review does not extend beyond this year. 7.2 Financing costs include the interest payable with respect to borrowing, interest payable on finance leases, interest and investment income, loans fund and finance lease principal repayments and gains/losses on the repurchase or early settlement of borrowing. 7.3 Revenue streams relate either to the amounts received in terms of government grant and local taxpayers for Non-housing, or to the amounts received from tenants in respect of housing rents for Housing. 7.4 The estimate of the incremental impact of the capital investment proposals outlined in this report for Non-housing services and as outlined in the Housing Capital Investment Plan for Housing services are: Ratio of financing costs to net revenue stream (estimated) 2026/27 2027/28 2028/29 % % & Non-housing 3.70% 3.80% 3.77% Housing 19.52% 22.70% 28.38% Page 65 of 118
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PUBLIC 7.5 The impact on Band D Council Tax is nil due to the fact that the financing costs resulting from any additional capital expenditure and related borrowing will be funded from government grant support and savings in other areas of expenditure. 8. Treasury Management Strategy Statement and the Prudential Code 8.1 In order to comply with the treasury management requirements of the Prudential Code, local authorities are required to adopt the Treasury Management Code. 8.2 This report covers the requirements of the latest (December 2021) version of the Treasury Management Code, including the treasury management indicators as defined therein, and the requirements of the Local Government Investments (Scotland) Regulations 2010 with regards consent from Scottish Ministers in respect of local authority investments. 8.3 The Council’s Treasury Management Strategy Statement for 2026/27 is set out here at sections 8 to 12, and constitutes the Council’s annual strategy and plan in relation to its treasury management activities, as defined by the 2021 version of the Treasury Management Code. 9. Treasury Management Strategy Statement: Objectives and responsibility for decision-making 9.1 The overall objectives of the Council’s treasury management strategy are: For borrowings: • to minimise the revenue costs of borrowing; • to manage the borrowing repayment profile; • to assess interest rate movements and borrow accordingly; • to monitor and review the level of variable rate loans held in order to take advantage of interest rate movements; and • to reschedule borrowing to improve the Council’s repayment profile or to reduce the revenue costs of borrowing. For temporary investments: • to protect the capital security and liquidity of the invested funds; and • to obtain an acceptable market rate of return subject to protecting capital security and liquidity of invested funds. Impact of capital investment decisions on: 2026/27 2027/28 2028/29 Band D Council Tax £0.00 £0.00 £0.00 Weekly Housing Rents £0.82 £1.57 £2.86 Page 66 of 118
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PUBLIC These objectives are set within the context of the Council’s overarching objective in relation to treasury management activities: the effective management and control of risk. 9.2 The Council has a contract with MUFG Corporate Markets (formerly Link Asset Services Limited), for the provision of treasury management consultancy services. It is recognised that there is value in employing such external service providers in order to acquire access to specialist skills and resources; however, responsibility for treasury management decisions remains with Renfrewshire Council at all times and undue reliance is not placed upon our external service providers. 9.3 The proposed Treasury Management Strategy for 2026/27 is based on a view of interest rates, supplemented by market forecasts provided by MUFG Corporate Markets, and covers the following aspects of the treasury management function: • treasury limits in force that limit the treasury risk and activities of the Council; • prudential and treasury management indicators; • the current treasury position; • the identified borrowing requirement; • prospects for interest rates; • the borrowing strategy; • policy on borrowing in advance of need; • debt rescheduling; • the investment strategy; • creditworthiness policy; and • policy on use of external service providers. Page 67 of 118
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PUBLIC 10. Treasury Management Strategy Statement: Borrowing strategy 10.1 Current external borrowing position The Council’s external borrowing position as at 20 January 2026 was as follows: External borrowing position As at 31 March 2025 As at 20 January 2026 Change in-year £m average interest rate £m average interest rate £m Long-term borrowings PWLB: fixed rate 237.050 3.77% 251.248 3.73% 14.198 PWLB: variable rate 0.000 0.00% 0.000 0.00% 0.000 Market loans 46.766 4.70% 46.766 4.70% 0.000 Total long-term borrowings 283.816 3.92% 298.014 3.88% 14.198 Total short-term borrowings 0.000 0.00% 0.000 0.00% 0.000 Total of all external borrowings 283.816 3.92% 298.014 3.88% 14.198 10.2 The increase in Public Works Loan Board (PWLB) borrowing of £20m taken during 2025/26 was offset by scheduled debt repayments made in the year. A further £0.810m of debt will be repaid, and further borrowing of £30m planned, by 31 March 2026. 10.3 There has been no new borrowing on the local authority market during 2025/26. 10.4 Projected Borrowing Position The Council’s anticipated borrowing position for 2026/27 and the two subsequent financial years is summarised in the following table. This shows the projected external debt compared to the estimated Capital Financing Requirement (the underlying need to borrow for a capital purpose) at the end of each of the next three financial years. Estimated Borrowing Position 2026/27 2027/28 2028/29 £m £m £m Borrowing 338 402 462 Other long-term liabilities 121 118 115 Total External Debt 459 520 577 Capital Financing Requirement 722 783 839 Under Borrowing 263 263 262 10.5 Several of the prudential indicators are designed to ensure that the Council carries out its treasury management activities within well-defined limits. One of these indicators shows that gross external debt does not, except in the short-term, exceed the total of the Capital Financing Requirement in 2025/26, and the estimated additional Capital Financing Requirement for 2026/27 and the two subsequent financial years. This allows some flexibility for limited early borrowing for future years, but ensures that borrowing is not taken to fund revenue expenditure. Page 68 of 118
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PUBLIC 10.6 The Council complied with this prudential indicator during 2026/27 and it is expected that this will remain the position over the forthcoming three-year period. As detailed in the table above, it is anticipated that the borrowing strategy will continue to progress based on using internal borrowing where possible over the medium term to mitigate both interest rate risk exposure for the Council and also risks associated with maintaining adequate capacity with appropriate investment counterparties. Some shorter-term borrowing may be required to fund the City Deal projects, however. This is required because the grant income for City Deal is phased over a 20-year period from 2015/16, while the project expenditure is incurred from 2015/16 to 2026/27. The requirement for borrowing to cover this period in advance of grant receipt is continually monitored and refined as projects are delivered, and this requirement is incorporated into the Council’s overall borrowing forecast. 10.7 Liability Benchmark Indicator The treasury prudential indicator introduced as part of the Treasury Management Code 2021 is the Liability Benchmark (LB). The Council is required to estimate and measure the LB for the next three financial years, as a minimum. CIPFA recommends that the LB is produced for at least 10 years and should ideally cover the full debt maturity period of the Council. There are four components to the LB: • Existing loan debt outstanding: the Council’s existing loans that are still outstanding for future years; • Loans CFR: this is calculated in accordance to the Capital Finance Requirement definition in the Prudential Code described in 3.7, excluding other liabilities; • Net Loans Requirement: this will show the Council’s gross loan debt less treasury management investments projected into the future, and is based on approved net capital expenditure and planned loans fund principal repayments; • Liability Benchmark: this equals the net loans requirement plus any short-term liquidity requirements. The Loans CFR is only allowed to reflect capital expenditure and loan fund repayments approved by Council, therefore only for net capital expenditure up to 2035/36. As the debt maturity profile extends well beyond this period, the usefulness of the liability benchmark as a prudential indicator is diminished beyond 10 years. Therefore, the liability benchmark is shown below for the 10-year period that CIPFA recommends, rather than for the full debt maturity period. The LB shown in the graph below is the total of PWLB and Market Loans. The LB is currently forecast to be above current borrowing largely as a result of the increase in the Capital Finance Requirement in 3.13, illustrating the likelihood that the Council will continue to require additional external borrowing until the gap in the LB is reduced to zero. Page 69 of 118
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PUBLIC 10.8 Interest Rate Forecast As part of MUFG’s treasury management consultancy service to the Council, assistance is provided in preparing a forecast of short-term and longer-term fixed interest rates. Current interest rate forecasts for the official bank rate paid on commercial bank reserves (the “Bank Rate”) and for PWLB borrowings rates are based on the Certainty Rate (the standard rate minus 20 bps), which has been accessible to the Council since 1 November 2012. 10.9 The central forecast is that the Monetary Policy Committee (MPC) will gradually reduce the interest rate, although this is expected to be a slower process due to the current economic climate. 10.10 Consequently, there is a high level of uncertainty over the timing of these forecasts, which involve much judgement over the optimal time to start reducing rates. Doing so too early could lead to an increase in inflationary pressures, but delaying this action could prolong any downturn or recession. Interest rate forecast Mar 2026 Jun 2026 Sep 2026 Dec 2026 Mar 2027 Mar 2028 Dec 2028 Bank Rate 3.75% 3.50% 3.50% 3.25% 3.25% 3.25% 3.25% The CPI measure of inflation stood at 3.4% in December 2025, remaining above the Bank of England Monetary Policy Committee’s 2% target, which it aims to achieve over a two‑ to three‑year horizon. Recent data on inflation and employment suggest that headline inflation is likely to ease over the course of 2026. The Bank will, however, need to exercise careful judgment in assessing the inflationary impact of the November £0 £100,000 £200,000 £300,000 £400,000 £500,000 £600,000 £700,000 £800,000 £900,000 £1,000,000 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 Total Amount (£'000) Liability Benchmark PWLB Loans Market Loans (excl LOBO loans) Existing Loan Debt Outstanding Net Loans Requirement (forecast net loan debt) Loans CFR Liability Benchmark (Gross Loans Requirement) Page 70 of 118
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PUBLIC UK Budget, and ongoing US tariff policies. In addition, geopolitical developments may play a significant role in shaping monetary policy in the coming months. 10.11 Forecasts for PWLB rates Whilst the yield curve for PWLB rates is anticipated to fall back over the period set out below, there does remain some short-term volatility within the market whenever new financial data on the economy is released. Interest rate forecast Mar 2026 Jun 2026 Sep 2026 Dec 2026 Mar 2027 Mar 2028 Dec 2028 5-year loans 4.60% 4.50% 4.30% 4.20% 4.10% 4.10% 4.10% 10-year loans 5.20% 5.00% 4.90% 4.80% 4.80% 4.70% 4.60% 25-year loans 5.80% 5.70% 5.60% 5.50% 5.50% 5.30% 5.20% 50-year loans 5.60% 5.50% 5.40% 5.30% 5.30% 5.10% 5.00% 10.12 Borrowing Decisions The main borrowing decisions to be made for 2026/27 are: • when to borrow; • for how long to borrow; and • whether to borrow externally or to use cash balances. 10.13 The Capital Investment Programme and maturity profile indicate that the Council may need to borrow up to £78m, either to fund new capital expenditure during 2026/27, or to replace loans due to mature that year. It should be noted, however, that consideration is given to the extent to which external borrowing is actually required, as detailed below. 10.14 The Council’s borrowing strategy will give consideration to new borrowing in the following order of priority: (i) The cheapest borrowing is currently internal borrowing, accessed by running down cash balances. However, where long-term borrowing rates are forecast to increase at a later date, consideration will also be given to locking in lower rates by borrowing earlier. The investment rate of return is also a deciding factor here; (ii) PWLB borrowing for a term of less than 10 years, potentially covering only the period where there is a need for cash. This offers a range of options for new borrowing which will spread debt maturity away from a concentration at longer- dated time periods; (iii) Short-dated borrowing from non-PWLB sources; (iv) Long-term borrowing arranged in advance in order to achieve certainty on future borrowing costs and reduce exposure to interest rate risk; (v) Long-term fixed rate market loans at rates significantly below PWLB rates for the equivalent maturity period (where available), with due regard to maintaining an appropriate balance between PWLB and market debt in the debt portfolio. Page 71 of 118
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PUBLIC 10.15 Sensitivity of the interest rate forecast Council officers, in conjunction with the Council’s treasury advisers, will continually monitor both the prevailing interest rates and the market forecasts, and will respond appropriately to material changes in interest rate forecasts, for example: • If it was believed that there was a significant risk of a sharp fall in long- and short- term interest rates than that currently forecast, then long-term borrowings would be postponed, with focus shifting to consideration of short-term borrowing to meet the Council’s need along with any opportunities for rescheduling; • If it was believed that there was a significant risk of a much sharper rise in long- and short-term interest rates than that currently forecast, then the portfolio position will be reappraised with a possible move to take on required borrowing whilst interest rates were still relatively low. 10.16 The forecast debt maturity profile at 31 March 2025 per the graph below shows the amount of debt maturing in future years. The Council has less than 30% of its total borrowings redeeming in any one of the next 25 years, with one year having a repayment just below 15% (14.54% in 2048/49). This will be monitored and likely rescheduled well in advance of this date to ensure there is no risk that it rises above 15%. This is well within the Council’s treasury indicators for debt maturity and therefore gives the Council the flexibility needed to structure new borrowing in a manner that minimises debt interest costs. 10.17 Since the Council has a capital investment plan covering the period to 2028/29 and detailed investment and borrowing analyses, advantage can be taken of opportunities that may arise to minimise interest rate risk. The Council will not borrow more than or earlier than required, with the primary intention to profit from the investment return of the extra sums borrowed. Pre-borrowing of this nature will only be taken for risk 0 5 10 15 20 25 30 35 40 45 2025/26 2027/28 2029/30 2031/32 2033/34 2035/36 2037/38 2039/40 2041/42 2043/44 2045/46 2047/48 2049/50 2051/52 2053/54 2055/56 2057/58 2059/60 2061/62 2063/64 2065/66 2067/68 2069/70 2071/72 £ Millions Debt Maturity Profile PWLB Loans Other Loans Page 72 of 118
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PUBLIC management reasons and subject to sound justification. The timing of any new borrowing of this nature will take into account the management of liquidity and counterparty risk and also the projected movement in interest rates. 10.18 Caution will continue to be exercised and the Director of Finance and Resources will monitor the interest rate market. Should long-term rates start to rise or fall sharply, the debt portfolio position will be reappraised and appropriate action taken. 10.19 Debt Rescheduling opportunities The purpose of debt rescheduling is to reorganise existing borrowings in such a way as to amend the repayment profile of the borrowing portfolio, or to secure interest rate savings. 10.20 As short-term borrowing rates will be considerably cheaper than longer-term rates, there may be potential opportunities to generate savings by switching from long-term debt to short-term debt. However, such potential savings will be considered in the light of their short-term nature and risks associated with potential longer-term costs of refinancing those short-term loans once they mature. 10.21 Consideration will also be given to the potential for making savings by running down investment balances to repay debt prematurely, as short-term rates on investments may be lower than rates paid on current debt. Page 73 of 118
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PUBLIC 11. Treasury Management Strategy Statement: Annual Investment Strategy 11.1 Investment Policy In carrying out investment activities, the Council has regard to the Local Government Investment (Scotland) Regulations 2010, the accompanying Scottish Government Finance Circular 5/2010, the 2021 Treasury Management Code, and the CIPFA Treasury Management Guidance Notes 2021. 11.2 The Council’s investment priorities are: • the security of capital; and • the liquidity of its investments. 11.3 The Council will also aim to achieve the optimum return on its investments commensurate with proper levels of security and liquidity. The risk appetite of the Council is low-to-medium, with absolute priority given to the security of its investments. In the current economic climate, it is considered appropriate to keep investments short- term to cover cashflow needs. However, where appropriate, the Council will also consider the value available in periods up to 24 months with high credit rated financial institutions, as well as wider range fund options. 11.4 The borrowing of monies purely to invest or on-lend to make a return is prohibited and the Council will not engage in such activity. 11.5 In the current economic climate, it is considered appropriate to maintain a degree of liquidity to cover cash flow needs but also consider investments for periods up to 12 months with high credit rated institutions, whilst investment rates remain elevated, as well as a wider range of fund options. 11.6 Investment instruments identified for use in the financial year are listed in Annex A, and counterparty limits will be set as defined within the Council’s Treasury Management Practices (TMPs) documentation. 11.7 External Investment Position The Council’s external investment position as at 20 January 2026 was as follows: External investment position As at 31 March 2025 As at 20 January 2026 Change £m average interest rate £m average interest rate £m Temporary investments 23.040 4.45% 61.030 3.75% 25.163 The increase in the Council’s short-term, or temporary investments during the period reflects borrowing to meet cashflow requirements for the remainder of the financial year. Page 74 of 118
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PUBLIC 11.8 The average rate of interest received on the Council’s temporary deposits has decreased by 0.7%. The decrease reflects that the Bank of England base rate is now gradually dropping, resulting in lower returns, which is expected to continue over the medium term. The Council will continue to monitor future rate movements and when appropriate will lock into longer term temporary deposit deals with counterparties of particularly high creditworthiness, securing a higher overall rate of return across the portfolio without compromising the security of investments. 11.9 Creditworthiness Policy In order to maintain an approved list of counterparties (institutions with which the Council will invest funds), the Council applies the creditworthiness service provided the Council’s treasury advisers and are based on the credit ratings from the three major credit rating agencies: Fitch, Moody’s and Standard & Poor’s. The Council understands that credit ratings are a good, but not perfect, predictor of investment default. Full regard will therefore be given to other available information on the credit quality of the organisations in which it invests, including: • credit default swap (CDS) spreads, to give early warning of likely changes in credit ratings; • financial statements; • sovereign ratings, to select counterparties from only the most creditworthy countries; • credit ratings relevant to the specific investment or class of investment, where available; and • the financial press. 11.10 This modelling approach combines credit ratings, credit watches and credit outlooks in a weighted scoring system which is then combined with an overlay of CDS spreads for which the end product is a series of colour-coded bands indicating the relative creditworthiness of counterparties. These colour codes are used by the Council to determine the suggested duration for investments, and are shown in Annex B. 11.11 The approved list of counterparties (Annex B) also defines a maximum limit on the aggregate value of deposits placed with each counterparty. The purpose of this is to ensure that the Council does not deposit an excessive proportion of its funds with any single institution. The counterparty limit for each bank and building society has been set at 10% and the limits for Money Market Funds and enhanced cash funds has been set at 10% of the total cash balances held by the Council at the time the investment is made. Some institutions have a lower % limit depending on their credit rating. This approach allows the Council to meet its cashflow management objectives whilst appropriately spreading investment risk over a range of counterparties and underlying investment instruments. The limits will be continually reviewed for appropriateness throughout 2026/27. Page 75 of 118
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PUBLIC 11.12 All credit ratings are monitored daily. MUFG alerts the Council to rating changes made by any of the three rating agencies, and should a downgrade result in the counterparty or investment scheme no longer meeting the Council’s minimum criteria, its further use as a new investment will be withdrawn immediately. 11.13 Sole reliance is not placed on the use of this external service: the Council will make its own judgement based on the adviser’s suggestions, but will also use market data and market information, the quality financial press, information on government support for banks and the credit ratings of that government support. 11.14 The Council will retain a holding of Euros in relation to the Renfrew bridge project, until the final account and any retentions are fully settled. The Creditworthiness Policy for holding Euros will be the same as outlined from 11.9 to 11.13. Investment Decisions 11.15 The current forecasts from MUFG (see point 10.9 above) indicate that the Bank Rate is likely to gradually reduce to 3.50% in June 2026 followed by a further reduction by December 2026, before stabilising over subsequent years. 11.16 Investments will be made with reference to core balance and cashflow requirements and the outlook for short-term interest rates (i.e. for investments up to 12 months). Greater returns are usually achievable by investing for longer periods. While most cash balances are required in order to manage variations in cashflow, careful consideration is given to investing identified cash sums for longer periods, where appropriate. 11.17 The majority of the Council’s temporary cash balance is currently invested in short-term deposits with the Debt Management Office, Money Market Funds and short-term deposits with banks. The Council will continue to invest with these institutions; however, if attractive rates become available with counterparties of particularly high creditworthiness, making longer-term deals worthwhile and within the risk parameters set by the Council, then longer-term investments will be considered. 11.18 Investment decisions will require to take account for balances held in Euros as per paragraph 11.14. The Council will closely monitor exchange rate movements and may use risk management tools or instruments available, such as a forward contract or advance purchase of foreign currency to hold in an account until such time as required; always providing that these measures are used only for the prudent management of the Council’s financial affairs and not for any speculative purpose. Investment Performance 11.19 The Council will use an investment benchmark to assess the investment performance of its investment portfolio based on the 7-day compounded SONIA rate. 11.20 SONIA (Sterling Overnight Index Average) is a single rate published each day by the Bank of England, reflecting overnight rates paid on eligible sterling denominated deposit transactions conducted the previous day. Page 76 of 118
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PUBLIC 11.21 It should be noted that, provided the Bank of England base rate remains stable, the Council’s investment rate performance should be close to SONIA, particularly given the current short-term nature of the Council’s deposits, which averaged 14 days as at 20 January 2026. 12. Treasury Management Strategy Statement: treasury management indicators 12.1 The Guidance Notes for Local Authorities that accompany the CIPFA Treasury Management Code specify four treasury management indicators covered by the Prudential Code: (i) authorised limit for external debt; (ii) operational boundary for external debt; and (iii) liability benchmark Details of these indicators can be found in sections 4 and 10 of this Appendix. 12.2 The Guidance Notes for Local Authorities that accompany the Treasury Management Code specify an additional treasury management indicator: the maturity structure of borrowing. 12.3 Maturity Structure of Borrowing The Council is required to set, for the forthcoming financial year, both upper and lower limits with respect to the maturity structure of its borrowing. This is to ensure that the Council is not exposed to large concentrations of debt maturing in a single year that require to be replaced when interest rates could be unfavourable. It is recommended that the Council approves the following limit as the Maturity Structure of Borrowing indicator for the forthcoming financial year: Maturity structure of borrowing 2026/27 lower limit upper limit under 12 months 0% 15% 12 months and within 24 months 0% 15% 24 months and within 5 years 0% 45% 5 years and within 10 years 0% 50% 10 years and above 0% 100% Page 77 of 118
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PUBLIC Annex A: Permitted Investments The Council approves the forms of investment instrument for use as permitted investments as set out in tables 1, 2 and 3. Please also refer to section 11 above. A.1 Table 1 lists the permitted investments of a cash-type nature, available for use by the Council’s in-house Treasury Management team: Permitted Investments Table 1 Description / Objectives Minimum Credit Criteria Liquidity Risk Market Risk Maximum Share of Total Investments Maximum Maturity Period Debt Management Account Deposit Facility (DMADF) Offers the lowest risk form of investment available to local authorities as it is effectively an investment placed with central government. It is also easy to use because it is a deposit account and avoids the complications of buying and holding UK Government-issued treasury bills or gilts. As it is low risk it also earns low rates of interest and is useful where there may be a short-term priority to avoid credit risk. The longest term deposit that can be made with the DMADF is six months. Not applicable Term No 100% 2 years Longer-term deposits with local authorities Similar to term deposits with other local authorities (below) except that deposits are placed for longer periods: between 2 and 5 years. For longer term deposits, the decision to include any given local authority on the counterparty list will be based on the outcome of due diligence undertaken on that local authority by the Council’s treasury advisers. Similar to term deposits with local authorities, no more than £10m can be placed with any one institution or group. Per approved counterparty list Term No 20% 10 years Call accounts and notice accounts with banks and building societies Offer access to recalling cash deposited over short call periods (call account periods vary from short-term such as 7 days, but can extend to 32- and 95-day notice periods). This generally means accepting a lower rate of interest than that which could be earned from the same institution by making a term deposit. However, call accounts can offer interest rates two to three times more than term deposits in the DMADF. A certain level of call account use is highly desirable to ensure that the Council has ready access to cash when required. Per approved counterparty list Instant / notice period No 100% Up to 100 days Term deposits with banks and building societies Includes callable deposits, whereby the principal deposited is protected and earns a fixed rate of interest but can be terminated early at the bank’s discretion. Per approved counterparty list Term No 100% Per approved counterparty list Page 78 of 118
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PUBLIC Permitted Investments Table 1 Description / Objectives Minimum Credit Criteria Liquidity Risk Market Risk Maximum Share of Total Investments Maximum Maturity Period Term deposits with local authorities The most widely used form of investment used by local authorities, it offers a much higher rate of return than the DMADF (dependent on the deposit term) and, now that measures have been put in place to avoid any over-reliance on credit ratings, there is greater confidence that the residual risks around using local authorities, banks and building societies are at a low, reasonable and acceptable level. The Council ensures diversification of its portfolio of deposits by having no more than 10%* (£20m for other Scottish local authorities and £15m for other local authorities) of the total portfolio placed with any one institution or group. Longer-term deposits offer an opportunity to increase investment returns by locking into relatively high interest rates ahead of an expected fall in rates. Longer-term rates can also offer good value when the markets incorrectly assess the speed and timing of interest rate increases. Offers flexibility and a higher level of earnings than the DMADF; however, once a longer-term investment is made, cash is ‘locked in’ and cannot be accessed until the maturity date. Not applicable Term No 100% 2 years Treasury bills Short-term bills (up to 12 months) issued by the Government and so backed by the sovereign rating of the UK. The yield is higher than the rate of interest paid by the DMADF and another advantage is that they can be sold if there is a need for access to cash at any point in time. However, there is a spread between purchase and sale prices, so early sales could incur a net cost during the period of ownership. UK sovereign rating T+1 Yes 75% 1 year Certificates of deposit issued by banks and building societies Shorter term securities issued by deposit taking institutions (mainly financial institutions). They are negotiable instruments, so can be sold ahead of maturity and also purchased after they have been issued. This liquidity can come at a price, where the yield could be marginally less than placing a deposit with the same bank as the issuing bank. Per approved counterparty list T+1 Yes 10% Per approved counterparty list Page 79 of 118
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PUBLIC Permitted Investments Table 1 Description / Objectives Minimum Credit Criteria Liquidity Risk Market Risk Maximum Share of Total Investments Maximum Maturity Period UK Government gilts Longer-term debt issuance by the UK Government, backed by the sovereign rating of the UK. The yield is higher than the rate of interest paid by the DMADF and they can be sold if there is a need for access to cash at any point in time. However, there is a spread between purchase and sale prices, so early sales may incur a net cost. Market movements that occur between purchase and sale may also have an adverse impact on proceeds. An advantage over Treasury bills is that they generally offer higher yields the longer it is to maturity (for most periods) if the yield curve is positive. UK sovereign rating T+1 Yes 75% 2 years Money Market Funds (MMFs) By definition, MMFs are AAA-rated (the highest security rating available) and widely diversified, using many forms of money market securities including types that the Council does not have the expertise or risk appetite to hold directly. However, due to the high level of expertise of the fund managers and the significant amounts of funds invested in MMFs, and the fact that the weighted average maturity (WAM) cannot exceed 60 days, MMFs offer a combination of high security, instant access to funds, high diversification and good rates of return compared to equivalent instant access facilities. Particularly advantageous in a falling interest rate environment as their 60-day WAM means they have locked-in investments earning higher rates of interest than available in the market. MMFs also help an organisation diversify its own portfolio, for example a £2m investment placed directly with a specific bank is a 100% risk exposure to that specific bank, whereas £2m invested in an MMF may result in only 1% being invested with a specific bank. MMFs offer an effective way of minimising risk exposure, while still getting better rates of return than available through the DMADF. Long-term AAA volatility rating Instant No 75% Not applicable Ultra-short dated bond funds Similar to MMFs, these can still be AAA-rated, but have variable net asset values (VNAV) as opposed to a traditional MMF which has a Constant Net Asset Value (CNAV). They aim to achieve a higher yield and to do this either take more credit risk or invest for longer terms, so they are more volatile. Can have WAMs and Weighted Average Lives (WALs) of 90–365 days or longer. Investment in these funds would only be undertaken in the event funds could be “locked out” for a minimum of 3-6 months in order to mitigate short-term fund value fluctuations. Bond fund rating T+1 to T+5 Yes 75% Not applicable Page 80 of 118
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PUBLIC Permitted Investments Table 1 Description / Objectives Minimum Credit Criteria Liquidity Risk Market Risk Maximum Share of Total Investments Maximum Maturity Period Pooled funds other than money market / ultra-short dated bond funds Shares or units in diversified investment vehicles covering property, bond and equity investments. Pooled funds whose value changes with market prices and/or that have a notice period will be used for longer investment periods. MMFs are included in Table 1, but the Council, given the extent of its long-term investment balances, may use this vehicle to diversify an agreed proportion (capped at a maximum of 25% of total investment balances) of its investment balances into longer term assets (property, bonds and equity) utilising pooled funds. Pooled funds have the advantage of providing wide diversification of investment risks, including credit risk and interest rate risk, coupled with the services of a professional fund manager in return for a fee. Property, bond and equity funds offer enhanced returns over the longer term, but their prices are more volatile in the short term, leading to the risk that they could be sold at below their purchase price. This risk is mitigated by only placing cash that is available for 3-5 years into more volatile funds. The Council’s officers in conjunction with its treasury advisers have determined that a proportion of the Council’s investments have and will remain available for longer term investment in the future. The funds selected will be subject to further scrutiny and suitability, drawing on the experience and advice of the Council’s treasury advisers. Long-term AAA volatility rating Various Yes 20% Not applicable * In recognition of the restricted number of approved counterparties that now meet our more stringent lending criteria, there is an added degree of flexibility introduced to the maximum deposit level. The deposit level with any one institution can now extend to a maximum of 15%, where the element which exceeds the 10% threshold is deposited on the basis of a call account deposit with the institution. Other types of investment instrument available to the Council: (i) Forward foreign exchange contracts and options: These are only utilised in order to manage specific known exchange rate risks and not for speculative purposes. A forward contract may be entered into in order to hedge against exchange rate risk where the amount and date of a payment in a foreign currency is known in advance. An option is a premium paid product which gives the right, but not the obligation, to purchase a pre agreed EUR amount, at a pre agreed rate and date. (ii) Operational bank accounts: The Council may incur operational exposures, for example though current accounts, collection accounts and merchant acquiring services, with its main operational bank, Nationwide (Virgin Money), which carries an S&P credit rating of A+. These are not classed as investments, but are still subject to the risk of a bank bail-in, and balances will normally be kept below £100,000; Page 81 of 118
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PUBLIC however, for short periods (normally over public holidays) this balance may be higher with the approval of the Director of Finance and Resources. A.2 Table 2 lists the permitted investments of a cash-type nature, available for use by the investment managers of the Council’s Insurance Fund: Permitted Investments Table 2 Minimum Credit Criteria Liquidity Risk Market Risk Maximum Share of Total Investments Maximum Maturity Period Equities Delegated to investment managers Term Yes‡ 33% ±10% Not applicable Fixed-interest securities Delegated to investment managers Term Yes‡ 33% ±10% Not applicable Other assets Delegated to investment managers Term Yes‡ 33% ±10% Not applicable ‡ Market risk is mitigated since investment managers have been instructed to maintain low volatility by investing in a diversified portfolio which incorporates (i) a broad spread of equities, both directly and indirectly (through pooled funds), and (ii) a proportion of fixed-interest securities and cash. A.3 Table 3 lists the permitted investments of a non-cash nature available for use by the Council: Permitted Investments Table 3 Treasury Risks Mitigating Controls Maximum Share of Total Investments Share holdings, unit holdings and bond holdings, including those in a local authority-owned company Service investments that may exhibit market risk; likely to be highly illiquid Each equity investment requires Member approval and each application will be supported by the service rationale behind the investment and the likelihood of loss Policy driven, managing all associated risks; authorised limit and operational boundary apply Loans to a local authority-owned company or other entity formed by a local authority to deliver services Service investments either at market rates of interest or below (soft loans); may exhibit credit risk; likely to be highly illiquid Each loan to a local authority company requires Member approval and each application will be supported by the service rationale behind the loan and the likelihood of full or partial default Policy driven, managing all associated risks; authorised limit and operational boundary apply Page 82 of 118
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PUBLIC Permitted Investments Table 3 Treasury Risks Mitigating Controls Maximum Share of Total Investments Loans made to third parties, including soft loans (for example, employee loans) Service investments either at market rates of interest or below (soft loans); may exhibit credit risk; likely to be highly illiquid Each third party loan (or tranche of loans) requires Member approval and each application will be supported by the service rationale behind the loan and the likelihood of full or partial default Policy driven, managing all associated risks; authorised limit and operational boundary apply Investment property Non-service properties which are being held pending disposal or for a longer-term rental income stream; these are highly illiquid assets with high risk to value Property holding will be revalued regularly and reported at appropriate periodic intervals for a property investment portfolio in respect of rental levels; in terms of surplus assets held for disposal, the Council has an active surplus property disposal strategy which ensures a coordinated and managed approach is adopted to the disposal of such sites in a way which is reflective of current and future anticipated market conditions, seeks to maximise market interest in site disposals and secures best value for the Council Policy driven, managing all associated risks; authorised limit and operational boundary apply A.3 Treasury risks All investment instruments listed in Tables 1 and 2 above are subject to the following risks and their mitigating controls: Treasury Risk Description Mitigating Controls Credit and counterparty risk: The risk of failure by a counterparty (bank or building society) to meet its contractual obligations to the Council, particularly as a result of the counterparty’s diminished creditworthiness, and the resulting detrimental effect on the Council’s capital or current (revenue) resources. There are no counterparties where this risk is zero although AAA-rated organisations have a very high level of creditworthiness. The Council has set minimum credit criteria to determine which counterparties and countries are of sufficiently high creditworthiness to enable investments to be made safely. Page 83 of 118
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PUBLIC Treasury Risk Description Mitigating Controls Liquidity risk: The risk that cash will not be available when it is needed. While it could be said that all counterparties are subject to at least a very small level of liquidity risk, as credit risk can never be zero, in this document liquidity risk has been treated as whether or not instant access to cash can be obtained from each form of investment instrument. The Council has a cashflow forecasting model to enable it to determine the duration for which individual investments can be made, and how much can be invested. Interest rate risk: The risk that fluctuations in the levels of interest rates create an unexpected or unbudgeted burden on the organisation’s finances, against which the organisation has failed to protect itself adequately. The Council has set limits for its fixed and variable rate exposure in its treasury indicators as detailed in this report. The Council manages this risk by having a view of the future course of interest rates and formulating a treasury management strategy accordingly. The strategy aims to maximise investment earnings consistent with control of risk and minimise expenditure on interest costs on borrowing. Legal and regulatory risk: The risk that the Council, or an organisation with which it is dealing in its treasury management activities, fails to act in accordance with its legal powers or regulatory requirements, and that the Council suffers losses accordingly. The Council will not undertake any form of investing until it has ensured that it has all necessary powers to do so. The Council will ensure that it complies with all applicable regulations in carrying out its treasury management operations. Exchange rate risk: The risk that fluctuations in foreign exchange rates create an unexpected or unbudgeted burden on the Council’s finances, against which it has failed to protect itself adequately. The Council will closely monitor exchange rate movements and may use risk management tools or instruments available, such as a forward contract or advance purchase of foreign currency to hold in an account until such time as required; always providing that these measures are used only for the prudent management of the Council’s financial affairs and not for any speculative purpose. Page 84 of 118
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PUBLIC Treasury Risk Description Mitigating Controls Market risk: The risk that, through adverse market fluctuations, the value of investments may decline over a given time period simply because of economic changes or other events that impact large portions of the market. Asset allocation and diversification can protect against market risk because different portions of the market tend to underperform at different time times. The Director of Finance and Resources has the authority to invest the funds of the Insurance Fund in such investments, securities or property as deemed fit. The Director and officers rely on professional investment managers (currently LGT Wealth Management) for the day-to-day management of the assets of the Council’s Insurance Fund. The investment managers are responsible for the allocation of assets between types of investments and the selection of individual stocks within each type of investment. The investment fund’s principal objective is achieving moderate capital growth in combination with low volatility to mitigate the impact of market risk. To achieve this, the investment managers operate within predefined asset allocation limits, as outlined in Table 2 above. Page 85 of 118
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PUBLIC Annex B: Renfrewshire Council Counterparty List Counterparty Country of Domicile % Limit £M Limit Max Investment period UNITED KINGDOM: BANKS & BUILDING SOCIETIES Virgin Money / Nationwide (Clydesdale Bank) GB 10% 20.0 6 months Bank of Scotland PLC / Lloyds (RFB) GB 10% 20.0 12 months Barclays Bank UK PLC (RFB) GB 10% 20.0 6 months Goldman Sachs International Bank GB 10% 20.0 6 months Handelsbanken PLC GB 10% 20.0 12 months HSBC Bank PLC (RFB) GB 10% 20.0 12 months Royal Bank of Scotland / NatWest PLC (RFB) GB 10% 20.0 12 months Santander UK PLC GB 10% 20.0 6 months SMBC Bank International PLC GB 10% 20.0 6 months Standard Chartered Bank (includes sustainable) GB 10% 20.0 6 months UNITED KINGDOM: OTHER INSTITUTIONS UK Local Authorities GB 100% 100% 2 YEARS UK Government GB 100% 100% 50 years COMMONWEALTH OF AUSTRALIA AU Australia and New Zealand Banking Group AU 10% 20.0 12 months Commonwealth Bank of Australia AU 10% 20.0 12 months Macquarie Bank Ltd. AU 10% 20.0 12 months National Australia Bank Ltd AU 10% 20.0 12 months Westpac Banking Corporation AU 10% 20.0 12 months GOVERNMENT OF CANADA CA Bank of Montreal CA 10% 20.0 12 months Bank of Nova Scotia CA 10% 20.0 12 months Canadian Imperial Bank of Commerce CA 10% 20.0 12 months National Bank of Canada CA 10% 20.0 12 months Royal Bank of Canada CA 10% 20.0 12 months Toronto-Dominion Bank CA 10% 20.0 12 months FEDERAL REPUBLIC OF GERMANY DE Bayerische Landesbank DE 10% 20.0 12 months Landesbank Hessen-Thueringen Girozentrale DE 10% 20.0 12 months Page 86 of 118
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PUBLIC Counterparty Country of Domicile % Limit £M Limit Max Investment period MONEY MARKET FUNDS Aviva Investors GBP Liquidity Class 3 IR 10% 20.0 Call Aviva Investors EUR Liquidity Class 8 IR 10% 20.0 Call BlackRock ICS Euro Liquidity Fund IR 10% 20.0 Call BlackRock ICS Sterling Liquidity Fund IR 10% 20.0 Call CCLA - Investment Management Ltd (Sterling) GB 5% 10.0 Call Federated Short-Term Euro Prime Fund GB 10% 20.0 Call Federated Short-Term Sterling Prime Fund GB 10% 20.0 Call Deutsche Managed Euro Fund IR 10% 20.0 Call Deutsche Managed Sterling Fund IR 10% 20.0 Call Goldman Sachs Euro Liquid Reserves IR 10% 20.0 Call Goldman Sachs Sterling Liquid Reserves IR 10% 20.0 Call Insight Liquidity Funds PLC - EUR Liquidity Fund IR 10% 20.0 Call Insight Liquidity Funds PLC - GBP Liquidity Fund IR 10% 20.0 Call Royal London Sterling Liquidity Fund (Sterling) IR 10% 20.0 Call Page 87 of 118
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PUBLIC Appendix 4: Capital Strategy 2026 to 2029 1 Introduction ..................................................................................................................... 1 2 Purpose and Aims ........................................................................................................... 1 3 Overview ......................................................................................................................... 2 4 Capital Expenditure and Financing ................................................................................. 2 5 Asset Management ......................................................................................................... 5 6 Treasury Management .................................................................................................... 5 7 Commercial Activities ...................................................................................................... 6 8 Other Long Term Liabilities ............................................................................................. 6 9 Governance .................................................................................................................... 7 10 Knowledge and Skills ...................................................................................................... 8 1 Introduction 1.1 This Capital Strategy report gives an overview of how capital expenditure, capital financing and treasury management activity contribute to the provision of public services in local government, along with an overview of how associated risk is managed and sustainability implications for the future. 1.2 Decisions made now on capital and treasury management will have financial consequences for the Council for many years to come. They are therefore subject to both a national regulatory framework and to local policy framework, summarised in this report. 2 Purpose and Aims 2.1 Following consultation, the Chartered Institute of Public Finance and Accountancy (CIPFA) published an updated version of the Prudential Code for Capital Finance in Local Authorities (“the Prudential Code”) in December 2021. 2.2 The key objectives of the Prudential Code are to ensure, within a clear framework, that; • capital expenditure plans and investment plans are affordable and proportionate; • all external borrowing and other long-term liabilities are within prudent and sustainable levels; • the risks associated with investments for commercial purposes are proportionate to their financial capacity; and • treasury management decisions are taken in accordance with good professional practice. Page 88 of 118
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PUBLIC 2.3 In keeping with the objectives above, the purpose of this Capital Strategy is to demonstrate that the Council takes capital investment decisions in line with service objectives that properly take account of value for money, prudence, sustainability and affordability, setting out the context in which capital expenditure, capital financing and treasury decisions are being made, and has given due consideration to risk. 3 Overview 3.1 An understanding of what constitutes capital expenditure and how it is financed is fundamental to realising the benefits and mitigating the risks to the Council under the prudential framework. 3.2 Capital expenditure is the investment in new or existing assets, such as property or vehicles, that will generate economic benefits or service improvements that will be realised by the Council for a period of more than one year. 3.3 All capital expenditure must be financed, either from external sources (government grants and other contributions), internal sources (current revenue and capital receipts) or debt (borrowing and leasing). 3.4 Financing capital expenditure through debt offers the opportunity to spread the cost over future revenues through loans fund repayments. However, due to the interest payments associated with debt, the total cost is usually higher than other methods of capital financing. Therefore, careful planning and monitoring procedures must be in place to ensure capital investment decisions offer value for money and are affordable and sustainable for current and future revenue budgets. 4 Capital Expenditure and Financing 4.1 The Council is obliged to determine the maximum it may allocate to capital expenditure, in line with statutory guidance. The planned limits are shown in the table below. The Housing Revenue Account (HRA) is a ring-fenced account, which ensures that council housing does not subsidise, or is not itself subsidised by, other local services. HRA capital expenditure is therefore recorded and reported separately. Estimated Capital Expenditure 2026/27 2027/28 2028/29 £000s £000s £000s Non-Housing 106,948 66,488 34,636 Housing 40,808 55,131 73,804 Total Resource Availability 147,756 121,619 108,440 4.2 The Council Plan "Creating a fairer Renfrewshire built on innovation, wellbeing and opportunity" was agreed in September 2022 and outlines five strategic priorities for the Council over the period to 2027. The Council Plan provides a “golden thread” that ensures these priorities translate into specific spend programmes. Page 89 of 118
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PUBLIC 4.3 The Plan contains an over-arching theme of “improving outcomes for children and families”. Every one of the five strategic priorities should directly contribute to this outcome and demonstrate that services are working together to get it right for children, families and communities. 4.4 Below is a summary of the five strategic themes from the Council Plan, and some related projects within the Capital Plan 2026 to 2029: Place – working together to enhance wellbeing across communi�es £4.7m investment in cultural and economic infrastructure, in particular completing the transformation of Paisley Museum. £5.2m investment in regeneration through a mixture of projects leading to transformative investments which will drive economic activities and re-purpose town centres to become more diverse, successful and sustainable. £42.4m of improvements in infrastructure within Renfrewshire improving roads, traffic management, bridges and street lighting and £12.5m investment in property lifecycle maintenance. Economy – building an inclusive, green and resilient economy Con�nued investment in comple�ng the City Deal projects which will lead to total spend of £44.8m on infrastructure in Renfrewshire, transla�ng into an improved local economy and improved connec�vity. Fair – nurturing bright, happy and healthy futures for all A schools investment programme totalling £93.4m, including part-funding under the Scottish Government Learning Estate Investment Programme that will lead to a new build community campus at Renfrew Road, Paisley to replace Paisley Grammar school, and new build projects for the Dargavel area. £0.6m for upgrades to artificial pitches, £0.5m to complete investment for an internal play centre at the Lagoon, £0.7m investment in community halls refurbishment allowing access for all to congregate, explore, play and learn in a safe and exciting environment. Green – leading Renfrewshire to Net Zero Investment in parks, play areas, outdoor access and nature restoration of £0.3m Living our values – making a difference together £2.9m investment in new ICT equipment and software to improve Council services 4.5 A full copy of the Council Plan is available on the Council’s website by following Your Council > Information, performance and statistics > Plans, policies and strategies. Renfrewshire Council Plan. Page 90 of 118
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PUBLIC 4.6 As stated in 3.3, all capital expenditure must be financed either from external sources, internal sources or through borrowing. The planned financing of the above expenditure is shown on the table below: 2026/27 2027/28 2028/29 £000s £000s £000s Prudential Borrowing 30,961 20,302 13,163 Total Borrowing 30,961 20,302 13,363 General Capital Grant 11,706 12,000 12,000 BAE contribution (Park Mains) 0 18,000 0 Usable Capital Receipts 19,455 6,637 375 Capital Funded from Current Revenue (CFCR) 44,826 9,549 9,098 Total Resource Availability 106,948 66,488 34,636 4.7 Debt is only a temporary source of finance, since loans and leases must be repaid, and it is replaced over time by other financing, usually from revenue, which is known as loans fund repayments. 4.8 The Council’s cumulative outstanding amount of debt finance that will be charged to future revenue budgets is measured by the Capital Financing Requirement (CFR). The CFR increases with new debt-funded capital expenditure and reduces with loans fund repayments; capital receipts can also be used to reduce the CFR. Based on the above figures for expenditure and financing, the Council’s estimated CFR is as follows: Capital Financing Requirement 2026/27 2027/28 2028/29 £000s £000s £000s Non-Housing 539,014 552,307 552,547 Housing 182,850 230,493 286,326 Total 721,864 782,800 838,873 4.9 The loans fund repayments, combined with interest payable on loans, forms the total charge to revenue, known as financing costs. An estimate of the total financing costs as a percentage of net revenue (the amount funded from Council Tax, government grants, business rates, or rental income in the HRA), is shown in the table below. Ratio of financing Costs to net revenue stream (estimated) 2026/27 2027/28 2028/29 % % % Non-Housing 3.70% 3.80% 3.77% Housing 19.52% 22.70% 28.38% Total Page 91 of 118
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PUBLIC 5 Asset Management 5.1 The Council’s Corporate Asset Strategy (CAS) sets out a high-level framework for the management for all the Council’s Assets. It guides the development and upkeep of strategies and plans for all classifications of assets. The strategy states an overall principle that all assets are owned corporately by the Council, and their management is co‐ordinated across the organisation to maximise the benefits for Renfrewshire, as well as to support the achievement of the vision for the area and the Council’s key objectives. 5.2 The Council is conducting a Strategic Property Review as part of its work around financial sustainability. The objective of this review is to assess the optimum size and shape of the Council’s property estate, reducing its carbon footprint and using buildings more efficiently to provide its services the findings of which will inform future capital plans. 5.3 The Council has recently agreed a learning estate strategy which outlines the principles which will inform the development of investment proposals in the schools and learning estate. This ambitious strategy will require the Council to also agree a clear and affordable longer term funding approach which will underpin planned investments, and will require the Council to make adequate provision within revenue budgets to support any required increase in borrowing capacity. 6 Treasury Management 6.1 Treasury management is concerned with keeping sufficient, but not excessive, cash balances to meet the Council’s spending requirements, whilst managing the risks involved. Surplus cash is invested until required, while temporary cash shortages will be met by borrowing. 6.2 The Council’s Treasury Management Strategy Statement (TMSS) contains objectives for borrowing and investments, with the overarching objective in relation to treasury management activities being effective management and control of risk. The full TMSS can be found within Appendix 3 of this report. 6.3 The main objectives of borrowing are to achieve a low, but certain cost of finance, while retaining flexibility should plans change in the future. Statutory guidance states that debt should remain below the CFR, except in the short-term. As can be seen from the table below, the Council expects to comply with this during the period 2026-29. Page 92 of 118
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PUBLIC Estimated Borrowing Position 2026/27 2027/28 2028/29 £m £m £m Borrowing 338 402 462 Other long-term liabilities 121 118 115 Total External Debt 459 520 577 Capital Financing Requirement 722 783 839 Under Borrowing 263 263 262 6.4 The Council is required to set an Operational Boundary for external debt. This is an estimate of the maximum external debt of the Council according to the probable events contained in the Council plans, budgets and strategies. Sustained or regular borrowing above the Operational Boundary would be a significant matter, requiring investigation and action. 6.5 The Authorised Limit for external debt is based on the same assumptions as those used to calculate the Operational Boundary; however, it is higher to allow sufficient headroom for unusual or exceptional cash requirements. The Authorised Limit reflects a level of borrowing that could be afforded in the short-term, but that would not be sustainable in the long-term. The Operational Boundary and Authorised Limits are as follows: Limits on External Debt 2026/27 2027/28 2028/29 £m £m £m Operational Boundary 722 783 839 Authorised Limit 752 816 875 6.6 Treasury investment requirements arise due to cashflow timings, i.e. receiving cash before it is due to be paid out again at a later date. The main objectives of treasury investments are to obtain an acceptable market rate of return, subject to protecting capital security and liquidity of invested funds. The focus is therefore on minimising risk rather than maximising returns. 7 Commercial Activities 7.1 These are investments made outside the normal treasury management activity, such as property investments, with the sole objective of making a financial surplus. The Council has no such investments at this time. 8 Other Long Term Liabilities 8.1 In addition to the borrowing detailed in 6.3 above, the Council has a number of service concession arrangements for the provision and maintenance of schools, and a residual waste facility, as well as leases accounted for as long-term liabilities under IFRS 16. 8.2 The Local Government Pension Scheme in Scotland (LGPS) is a funded, defined benefit, statutory occupational pension scheme. For Renfrewshire Council, the regional Page 93 of 118
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PUBLIC pension fund is the Strathclyde Pension Fund. As a funded scheme, the Council and its employees pay contributions into the fund, calculated at a level intended to balance the scheme’s pension liabilities with the scheme’s investment assets. Following an assessment by Strathclyde Pension Fund’s actuaries, Hymans Robertson, the value of the Council’s share of the net pension asset at 31 March 2025 was estimated at £691m. The surplus position was restricted in the annual accounts by an asset cap owing to accounting regulations, and this adjusted value was reported as a pension liability of £65m, representing the unfunded obligations of the scheme. 8.3 Provisions are made when an event has taken place that gives the Council a legal or constructive obligation that will probably require a settlement, usually in cash, but can be other economic or service benefits. At 31 March 2025 the Council had set aside long-term provisions of £5.2m related to holiday pay compensation and insurance claims. The long-term provisions will be reviewed for the 2025/26 Annual Accounts. 9 Governance 9.1 Capital Programmes: Potential capital projects will be assessed for strategic fit, achievability, affordability, practicality, revenue impact and non-monetary impacts such as future economic growth, environmental or social well-being. 9.2 Once the capital projects have been considered, the Capital Plan is approved annually by the full Council, setting out the funding available, means of financing and Prudential Indicators. No capital expenditure can be authorised unless it has been provided for in the approved capital plan or is within an officer’s delegated authority. The Financial Regulations set out the framework for transferring money between budgets. 9.3 Capital budget monitoring reports from the Director of Finance and Resources are considered by the relevant Policy Board and include explanations for any significant variances from budget targets. Policy Boards will consider and approve any actions required to bring financial performance within approved limits. 9.4 Each capital programme is assigned a responsible officer who will approve and monitor expenditure. They receive support from a variety of sources, for example, to receive capital budget reports; to ensure that the expenditure complies with the statutory definition of capital; that any external contracts agreed comply with the Standing Orders of the Council; or to obtain any advice on legal matters. 9.5 Treasury Management: Decisions on treasury management investment and borrowing are made daily and are therefore delegated to the Director of Finance and Resources and relevant staff, who must act within the parameters set out in the Treasury Management Strategy approved annually by full Council. A mid-year review of treasury management activity is presented each year to the Finance, Resources and Customer Services Policy Board, with a full year review reported to Council. 9.6 Commercial Activities: Property investments would be classified as capital expenditure and therefore included as part of the capital plan. Any commercial Page 94 of 118
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PUBLIC investment decisions would be made by the Council in line with its Financial Regulations and Standing Orders. 10 Knowledge and Skills 10.1 The Council employs professionally qualified and experienced staff with responsibility for making capital expenditure, borrowing and investment decisions, and ensures that its qualified staff meet their continuous professional development requirements. 10.2 The knowledge and experience of Council staff is supplemented by the use of external advisors and consultants that are specialists in their field. The Council currently has a contract with MUFG Corporate Markets (formerly Link Asset Services) for the provision of treasury management consultancy services. This approach is more cost effective than employing such staff directly and ensures that the Council has access to knowledge and skills commensurate with its risk appetite. Page 95 of 118
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PUBLIC PROCEDURE TO BE FOLLOWED AT THE MEETING OF RENFREWSHIRE COUNCIL TO BE HELD ON 26 FEBRUARY 2026 DURING CONSIDERATION OF ITEM 5 CONCERNING THE HOUSING REVENUE ACOUNT BUDGET, RENT LEVELS 2026/2027 to 2027/28 AND HOUSING CAPITAL INVESTMENT PLAN 2026/2027-2030/2031 The purpose of this note is to give Members advance notice of the procedure which Provost Cameron has agreed should be followed at the Meeting of the Council on 26 February 2026 viz: 1. The Convener of the Communities and Housing Policy Board (the Convener) will make her budget statement for financial year 2026/2027 and move as appropriate. She will then speak to the principal points of her proposals. The motion will require to be seconded. 2. For the purposes of the subsequent discussion and voting, the Convener's proposals will be taken as one motion. 3. An opportunity will then be given to the Leaders of the opposition groups and any other Members to move, and to have duly seconded, comprehensive amendments to the motion (i.e. taking together budget proposals, the rent levels and the capital investment plans). 4. The motion and any amendments will require to be produced in writing and a copy given to each of the Members present prior to being spoken to at the meeting. Provost Cameron may then adjourn the meeting for 20 minutes to allow Members to consider the terms of the motion by the administration and any amendments by the opposition groups or other Members. Corporate Meeting Rooms have been arranged for the adjournment as follows: Administration – Corporate Meeting Room 2, Labour - Corporate Meeting Room 1, Conservative – Corporate Meeting Room 3, Independents – Communications Room, Reform - Marriage Suite. 5. There shall be no formal restriction upon the length of time given to the Convener and the Leaders of the opposition groups and other Members to move their respective budget statements and speak in support of the principal points of their proposals. However, Provost Cameron shall have the power to require any person speaking to limit their speech in order to facilitate the conduct of the meeting. 6. Provost Cameron will then invite other Members to take part in the debate. 7. The debate will conclude with Provost Cameron giving the Convener an opportunity to reply. 8. A vote or votes will then be taken in accordance with the provisions of standing orders. Item 5 Page 97 of 118
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PUBLIC ___________________________________________________________________ To: Council On: 26 February 2026 ___________________________________________________________________ Report by: Director of Environment, Housing & Infrastructure and Director of Finance & Resources ___________________________________________________________________ Heading: Housing Revenue Account Budget & Rent Levels 2026/27 to 2027/28 and Housing Capital Investment Plan 2026/27 to 2030/31 ___________________________________________________________________ 1. Summary 1.1 This report details the proposed Housing Revenue Account (HRA) budget for financial year 2026/27. 1.2 The report highlights the impact of economic pressures on the HRA and sets out any operational pressures that have emerged, and the adjustments to budgets and resources required to deal with these pressures. 1.3 At its meeting on 27 February 2025, the Council unanimously agreed a three- year rent strategy that included a 7.5% rent increase in 2026/27 with a further 7.0% increase in 2027/28. This report reflects the impact of this being an average weekly rent increase in 2026/27 of £7.81. 1.4 The report also provides Members with results from the survey carried out this year with tenants, regarding service priorities. 1.5 The budget includes the additional recurring investment which doubled the capacity of the Neighbourhood improvements teams to four teams – one for every Local Area Housing Team - making environmental improvements to the grounds and areas around our homes. Page 99 of 118
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PUBLIC 1.6 The budget also includes £0.250m for Year 2 of the £0.600m YouDecide Tenant Fund, under which tenants determine how the funding is allocated. 1.7 The report also details the Housing Capital Investment Plan for 2026/27 to 2030/31, which will deliver a total investment of £337m in the Council’s housing stock over the 5-year period. It is anticipated that this level of investment will attract £51m of government grant for new builds and this results in a net capital programme amounting to £286m. 1.8 In setting the 2026/27 HRA budget, Members may wish to consider the medium and longer-term financial context for the HRA and note the planning assumption of CPI+1% rent increases in the financial years beyond the three- year rent strategy period 2025/26 to 2027/28 as well as considering the ongoing risks and challenges outlined in this report. ___________________________________________________________________ 2. Recommendations It is recommended that the Council: 2.1 notes the rent increase of 7.5% for all house rents and lock-ups for 2026/27, being the second year of a three-year rent strategy approved by Council on 27 February 2025, and which equates to an average weekly rent increase of £7.81; 2.2 notes the findings of the recent Tenant Survey exercise; 2.3 approves the Housing Revenue Account Budget for financial year 2026/27, as detailed in Appendix 2; 2.4 approves the Housing Capital Investment Plan 2026/27 to 2030/31, as detailed in Appendix 3 of the report; 2.5 approves the increased services charges and temporary accommodation charges for 2026/27, as detailed in section 4.11 and 4.13. within the report; and 2.6 notes the continuing requirement to achieve best value in the commissioning of works by having an optimum workflow over the 5 years of the investment plan and authorises the Director of Environment, Housing and Infrastructure to liaise with the Director of Finance and Resources to re-profile the capital programme and available resources, as necessary, in line with the appropriate limits established under the Council’s capital prudential framework arrangements. ___________________________________________________________________ Page 100 of 118
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PUBLIC 3. Background and Medium-Term Financial Context 3.1. The HRA operates a rolling 30-year Business Plan model, which is the standard operating practice amongst local authorities and Registered Social Landlords. The 30-year basis of the model reflects the need for a long-term planned approach to the replacement of major items such as rewiring, central heating, etc., aligned to the lifecycles of these elements. 3.2. The model ensures that planned rental income from the estimated 11,515 average number of lettable properties in 2026/27 is sufficient over the term of the plan to cover debt and servicing capital expenditure, including significant investment and regeneration initiatives, together with funding the annual costs of maintaining the housing stock and all HRA annual operating costs including staffing. 3.3. The Business Plan model is reviewed to take account of the adjusted base budget position from the previous year and to update any key assumptions, economic factors and known or emerging risks. This review process allows consideration to be given to the setting of rent levels for the forthcoming and future financial years through effective scenario planning. 3.4. The 30-year Business Plan model currently assumes 3.8% CPI (Consumer Price Index model) for the 2026/27 financial year, as in previous years, this reflected the rate published in September of the current financial year. The Business Plan assumes that CPI is on a decreasing trend until reaching the Bank of England’s 2.0% target by 2027/28. 3.5. Different levels of inflation have been applied to the main cost drivers from 2026/27 to reflect the expected impact more accurately on Renfrewshire’s cost base. This is reviewed annually across the cost drivers to reflect the actual levels of inflation impacting on the base costs. Over the longer term, cost increases revert to the assumed CPI forecasts noted in 3.4. 3.6. Until last year, although inflation on costs within the HRA has risen considerably, the HRA maintained lower than inflationary rent increases during previous years to minimise the in-year impact further on tenants. 3.7. The three-year rent strategy, approved by Council on 27 February 2025, provides tenants with a longer-term perspective on planned rent increases, moving away from the previous annual proposals. There is a risk that inflation could exceed the projected levels over the course of the multi-year strategy and while some contingency is included within the forecasts, the level of inflation will need to be closely monitored to determine if corrective action is required next year. Page 101 of 118
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PUBLIC 3.8. Members will recall that following a strategic review of the HRA it was determined that there was capacity in the HRA to fund an additional £100m investment and regeneration programme over the next decade. Council approved the proposals to take forward this first phase of investment, focusing on eight areas and around 1,100 council properties. Members will also recall that the plan also includes over £30m of investment required in high-rise accommodation. The cost of repayment on borrowing to deliver this ambition increased because of the economic climate creating higher interest rates. To ensure sufficient funding in the long term, an assumption of 1% above CPI as an uplift to rents is assumed for every year beyond 2025/26 to 2027/28 across the 30-year plan. 3.9. If a tenant receives benefits covering housing costs, they are likely to be protected from any increase. In Renfrewshire, around 76% of tenants receive some form of housing support. A rent rise would therefore result in some tenants receiving higher Housing Benefit, while others who do not currently claim may become entitled. Unless their personal circumstances change, most tenants will continue paying the same contribution towards their rent, with Housing Benefit covering the remainder. The tenancy support fund, established in 2023/24 to provide additional help for tenants in financial hardship, remains in place within the current budget proposals. ___________________________________________________________________ 4. HRA Budget Planning Assumptions for 2026/27 4.1. The rental income generated by the HRA must support service delivery, the costs of appropriately maintaining the housing stock, and the loan debt related costs to service the capital investment required in HRA assets. 4.2. The proposed budget adjustments for 2026/27 are shown across the high level HRA categories in summary form on Appendix 1 and analysed into the Policy Board revenue monitoring format in Appendix 2. To supplement the information contained in these appendices, additional contextual commentary is provided below, and this can be read in conjunction with Appendices 1 and 2. Revenue Expenditure 4.3. Supervision and Management includes the operational inflation and additional costs covering areas such as pay increases for housing staff, energy costs, and insurance costs. Budget is also required for council tax, and reflecting void levels this reduces in 2026/27 due to improved void targets. This line also includes the continuation of the increased Neighbourhood improvement teams from two to four and a further £0.250m of the YouDecide tenant fund as per the 3-year budget proposals. The employer pension contribution budget of £1.029m has been reinstated, reflecting the rate increasing to 17.5% from 1 Page 102 of 118
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PUBLIC April 2026. The overall combined impact of these pressures and additional investment is an increased net budget requirement of £2.963m for 2026/27. 4.4. Housing Repairs and Maintenance remains an area of significant budget pressure due to cost inflation, legislative change, an ageing asset base and sustained demand for services, alongside rising material, fuel, and labour costs. The budget has increased overall by £1.349m to take account of the very real and significant challenges around increasing costs. This included the impact of the Building Services employer pension budget of £0.551m being reinstated in 2026/27. 4.5. An additional £0.082m has been added to the budget to mitigate potential inflationary pressures associated with Grounds and Estates Maintenance. 4.6. The (£0.084m) net reduction in void rent loss reflects updated projections informed by revised operational targets and projected stock levels, and assumes a targeted improvement in void performance from the 2025/26 budget period. 4.7. The bad debt provision has been increased by £0.085m, reflecting the increased income collection levels and to reflect the associated risk in relation to increasing levels of bad debt. This budget continues to include funding to provide support to tenants in financial hardship, as approved in recent years. In terms of bad debt levels, this reflects an improved operational target for the 2026/27 budget. 4.8. Net financing costs have reduced by (£3.031m), reflecting lower borrowing than planned, while the contribution to the Capital Programme has increased by £4.066m. The resulting net increase of £1.035m is managed through reserve movements and is reflected within the overall rent increase assumed for 2026/27. These movements fluctuate year-on-year in line with investment requirements and long‑term financing projections. Revenue Income 4.9. The gross increase in Rental income (£4.014m), reflects the approved 7.5% increase on both house and lock-up rents. The stock movement assumptions for both houses and lock-ups are based on regeneration, demolition, and investment plans, as reflected in income assumptions. 4.10. In relation to lock-up rents, the average charge per lock-up is currently £24.89 per month and the 7.5% increase represents an average of £1.87 increase per month. A review of the existing lock-up portfolio is underway with a report on the options appraisal and consultation will be presented to a future Communities and Housing Policy Board. Page 103 of 118
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PUBLIC 4.11. Other Income is projected to increase by (£1.711m) mainly due to adjustments for the recovery of staffing-related costs. These costs are managed within the revenue expenditure budget but recovered through income. In last year’s Budget Proposals, we highlighted the need to review recharge models for service charge recovery. Rising costs have reinforced the importance of ensuring that charges are fairly allocated to the direct users of these services. At present, operating costs in most areas continue to exceed income recovery levels. It is therefore proposed that charges be increased this financial year in line with the rent uplift, as part of a phased transition back to full cost recovery across future budgets, in the following areas. Service Charge Owners Tenants 2025/26 2026/27 Sheltered Heating 0 191 £43.82pm £47.11pm Sheltered Laundrette 0 103 £3.52pm £3.78pm Laundrettes Council 0 1,704 £3.82pm £4.11pm Laundrettes Private 843 0 £19.76pm £21.24pm 4.12. These proposals include a planned contribution to reserves of £0.480m for 2026/27. At the end of the financial year, the contingency held within the HRA is forecast to be £3.654m. This reserve is intended to meet future and unforeseen cost pressures and is considered a prudent level of provision. The ICT system replacement reserve is held separately and will be partially utilised during the year as the project progresses through phase 1 implementation and into phase 2. Drawdowns from this reserve will be reported to the Communities and Housing Policy Board as required. Temporary Accommodation Properties 4.13. It is recommended that an increase of 7.5% is also applied to temporary accommodation charges. This adjustment has been carefully considered to reflect inflationary pressures while continuing to align with Housing Benefit support for eligible tenants. In line with Renfrewshire Council’s Temporary Accommodation Charging Policy, the homeless service charge is reviewed annually as part of the Council’s budget-setting process, with the aim of ensuring that income generated meets the full cost of service provision. By applying this increase, the Council can maintain its commitment to affordability, uphold its statutory duty to provide safe, suitable accommodation, and ensure the financial sustainability of the service without creating undue hardship for those in need. ___________________________________________________________________ 5. Tenant Consultation for 2025/26 – 2027/28 Rent Increase 5.1. Renfrewshire Council has a statutory duty to consult with tenants prior to implementing any rent increase. To inform the rent-setting approach for the Page 104 of 118
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PUBLIC period 2025–2028, the consultation focussed on the multi-year rent strategy which was subsequently approved at Council last year. 5.2. Although there was no obligation to carry out a full survey this year, given the agreed three-year rent strategy, a shorter survey was conducted to understand tenant views on service priorities. The results of this survey are summarised in the table below. Priority First Choice Second Choice Carrying out repairs and maintenance to your home 42.34% 26.61% Spending money on home improvements like bathrooms, kitchens, and roofs 21.77% 27.02% Making more houses available by re-letting properties quickly when they become vacant 11.29% 15.32% Regenerating housing areas by demolishing older properties, building new ones, and improving existing homes 9.27% 6.85% Focusing on energy efficiency measures like wall insulation and heating systems to reduce energy bills and future proof homes 6.85% 11.29% Building new council houses to provide affordable, modern, warm, and welcoming homes 6.05% 9.27% Doing environmental improvements like clearing overgrown bushes and rubbish in the grounds and open spaces around council housing 2.42% 3.63% 5.3. The survey shows that ‘Carrying our repairs and maintenance to your home’ is the main priority for council tenants, with improvements the second priority, and re-letting properties third. The survey results are useful for the service to deliver these priorities. The Service will gather more detailed information later this year when the Tenant Satisfaction Survey is commissioned. 5.4. The approved rent increase of 7.5% for 2026/27 will enable the Council to maintain the high level of planned investment across the 30-year HRA Business Plan. It will support continued focus over the next five years on improving energy efficiency, progressing the housing regeneration programme, and sustaining the additional Neighbourhood Improvement Teams. It will also fund Year 2 of the YouDecide Tenant Fund, as outlined within the option approved by Council last year. ___________________________________________________________________ 6. Housing Capital Investment Plan – 2026/27 to 2030/31 6.1 Overview 6.1.1 The proposed Housing Capital Investment Plan for the 5-year period from 2026/27 to 2030/31 is attached at Appendix 3. The gross value over the 5- year period in the Council’s housing stock is £337.338m. It is anticipated that Page 105 of 118
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PUBLIC this level of investment will attract £51.247m of government grant for new builds, etc., and this results in a net capital programme to be funded of £286.091m. The programme includes allowances for new build homes, related Scottish Government grants, regeneration and renewal, and the planned investment programmes required to ensure council house stock is maintained at the appropriate standards. 6.1.2 The planned net capital investment for each year is as follows: Financial Year Gross £m Income £m Net £m 2026/27 40.808 (9.702) 31.106 2027/28 55.131 (2.656) 52.475 2028/29 73.804 (12.099) 61.705 2029/30 89.921 (12.270) 77.651 2030/31 77.674 (14.520) 63.154 5 Year Total 337.338 (51.247) 286.091 The plan will be reviewed on an annual basis, incorporating an ongoing assessment of risk. 6.1.3 Authority is delegated to the Director of Environment, Housing, and Infrastructure in consultation with the Director of Finance and Resources, to flexibly manage the capital investment programme as necessary to ensure optimum use of resources within the approved limits of prudential borrowing. It is proposed that this delegation remains in place over the life of the new 5- year plan detailed in Appendix 3. 6.1.4 The table below sets out the proposed composition of the plan for 2026/27 and how it will be funded. Financial Year 2026/27 Expenditure £m Income £m Net £m Planned Investment Programmes 22.923 0.000 22.923 Regeneration and New Build, etc. 17.885 0.000 17.885 Government New Build Grant 0.000 (9.702) (9.702) Other Income 0.000 (0.575) (0.575) CFCR 0.000 (9.000) (9.000) Prudential Borrowing 0.000 (21.531) (21.531) Total 40.808 (40.808) 0.000 Page 106 of 118
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PUBLIC 6.2 Planned Investment Programmes 6.2.1 Since achieving compliance with the Scottish Housing Quality Standard (SHQS) in April 2015, there has been an ongoing requirement to ensure that housing stock continues to be maintained at least at this standard. 6.2.2 The capital programme for 2026/27 to 2030/31 as per the attached Appendix 3 will deliver a total of £203.908m in planned investment programmes in existing housing assets, £29.843m in New Supply of housing stock outwith the regeneration areas and a further £103.587m included as part of the Regeneration and Renewal Plan including New Supply within regeneration areas. The capital programme for the same period will attract (£51.427m) of income from government grants. 6.2.3 The Council is required to ensure that the HRA has capacity to deliver on regulatory requirements and standards, including ensuring that properties meet requirements such as SHQS and EESSH. In March 2025, 87.68% of Council housing stock was compliant with the EESSH1 target (after applying allowable exemptions). 6.2.4 The Scottish Government had introduced a higher EESSH2 standard to be met by 2032; however, this has been suspended, and the review of 2023 introduced the Social Housing Net Zero Standard (SHNZS). The SHNZS proposes the replacement of EPC targets with a minimum heat demand target for homes to achieve and the replacement of heating systems with clean heating alternatives. The standard aligns with net zero requirements and fuel poverty targets. The Scottish Government has announced the SHNZS will be part of the Heat in Buildings Bill, which will be introduced after the Scottish Parliament elections in May 2026. This standard will impact on the housing asset management strategy; however current retrofit projects will be in line with expected standards. 6.2.5 The main categories of planned investment programmes are: • External improvements, which include renewal of roofs, rainwater goods, and external fabric; • Internal improvements, which include replacing or upgrading kitchens, bathrooms, electrical wiring, and heating systems; • Multi storey flat and sheltered housing improvements; • Other investment including disabled adaptations, asbestos removal and rot works. 6.2.6 The main elements of the planned investment programme for 2026/27 will include the following: Page 107 of 118
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PUBLIC 2026/27 Planned Improvements Number of Properties External fabric upgrading (existing stock) 200 External fabric upgrading (regeneration programme) 160 Window and door improvement programme 500 Kitchen, bathroom, and rewiring replacement 600 Heating renewals 750 6.3 New Build and Regeneration 6.3.1 The Housing Led Regeneration and Renewal Plan covering eight communities across Renfrewshire was approved by the Communities, Housing and Planning Policy Board on 18 January 2022. The Capital Investment Plan outlines the anticipated timetable for this significant regeneration programme for the next five years. 6.3.2 As part of the Housing-Led Regeneration and Renewal Programme, construction of seventy new build Council homes for rent in the Howwood Road Area commenced on 3 November 2025. 6.3.3 Over and above the Housing-Led Regeneration and Renewal Programme construction of sixty-five new build Council homes in Gallowhill commenced on 4 August 2025. 6.3.4 The Strategic Housing Investment Plan 2026-31 approved by the Communities and Housing Policy Board on 28 October 2025, includes provision for Scottish Government grant funding for Council new build projects within four of the eight Housing-Led Regeneration areas and two areas outwith, namely, Gallowhill and Foxbar. 6.3.5 The new build grant benchmark rate for local authorities is a 3-person equivalent benchmark of £87,763 per unit, adjusted according to the size of accommodation being delivered. The new build specification has been updated to include the quality measures required to maximise grant claims where possible (silver level as a minimum, balconies to flatted developments, space for home working / study, digital enablement, fire suppression and zero emission heating). These additional measures will incur higher capital costs but will also attract additional grant funding over and above the 3-person equivalent benchmark rate to assist the ongoing delivery of energy efficient affordable new build Council homes for tenants. ___________________________________________________________________ Page 108 of 118
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PUBLIC Implications of the Report 1. Financial The report and appendices detail the proposed HRA budget and average weekly rent increase for 2026/27 and the Housing Capital Investment Plan for 2026/27 to 2030/31. 2. HR & Organisational Development While staffing budgets form a significant proportion of the Council’s revenue budgets, there are no direct staffing implications arising from the recommendations in this report. 3. Community/Council Planning Community Plan Our Renfrewshire is thriving. Enabling communities to have their voices heard and influence the places and services that affect them by consulting tenants on the proposed changes to rents for 2025/26 to 2027/28. The Council’s revenue and capital spend ensures that its facilities are fit for purpose and safe for the community, to maximise accessibility. Our Renfrewshire is well. Our Renfrewshire is fair. Our Renfrewshire is safe. Council Plan Reshaping our place, our economy, and our future Consulting tenants on the proposed changes to rents for 2025/26 to 2027/28 including creating a YouDecide Tenant Fund. Improving and maintaining housing conditions for the benefit of tenants and providing assistance to tenants to mitigate the impacts of any Welfare Reform changes. Continuing housing regeneration programmes across Renfrewshire to create sustainable communities. Building strong, safe, and resilient communities Tackling inequality, ensuring opportunities for all Creating a sustainable Renfrewshire for all to enjoy Accessing supplementary external funding where available to support the achievement of the minimum energy rating under the Energy Efficiency Standard for Social Housing. Page 109 of 118
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PUBLIC 4. Legal The Council is required to set an HRA budget for 2026/27 and agree any rent changes for notification to tenants. The Council must give tenants at least 28 days’ notification in advance of any changes. 5. Property/Assets The report proposes the Housing Capital Investment Plan for 2026/27 to 2030/31. The capital expenditure noted in this report will result in lifecycle maintenance improvements to existing properties and replacement of ICT assets and infrastructure. 6. Information Technology ICT assets and revenue costs are included within these budgets, and the costs associated with the replacement of the Housing Management system including ongoing revenue and capital budget impacts. 7. Equality & Human Rights The recommendations contained within this report have been assessed in relation to their impact on equalities and human rights. No negative impacts on equality groups or potential for infringement of individuals’ human rights have been identified arising from the recommendations contained in the report. If required following implementation, the actual impact of the recommendations and the mitigating actions will be reviewed and monitored, and the results of the assessment will be published on the Council’s website. 8. Health & Safety The Capital Plan outlines investment in Council assets and facilities to ensure they remain safe and accessible in line with statutory obligations. 9. Procurement The proposed Capital Investment Plan for 2026/27 to 2030/31 will include procurement of contracts, however there are no direct implications arising from the recommendations in this report. 10. Risk The HRA Business Plan remains subject to a number of risks and economic factors such as interest rates and inflation. While these risks are reviewed as part of the HRA business planning process, a high level of uncertainty Page 110 of 118
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PUBLIC remains relating to external economic factors. This risk increases with the setting out of a 3-year rent strategy and will remain under review annually. 11. Privacy Impact There are no direct implications arising from the recommendations in this report. 12. Cosla Policy Position Not applicable. 13. Children’s Rights There are no direct implications arising from the recommendations in this report. 14. Climate Risk Investment in Council assets improves energy efficiency, reducing the Council’s carbon footprint and helping it achieve its Net Zero by 2030 target. ___________________________________________________________________ List of Background Papers Housing Revenue Account Budget & Rent Levels 2025/26 and Housing Capital Investment Plan 2025/26 to 2029/30, 27 February 2025. Temporary Accommodation Charging Policy, Communities and Housing Policy Board, 14 January 2025. ___________________________________________________________________ Author: Gordon McNeil, Director of Environment, Housing, and Infrastructure Author: John Kilpatrick, Finance Business Partner Page 111 of 118
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PUBLIC Housing Revenue Budget – 2025/26 to 2026/27 Appendix 1 Revised Proposed Annual Budget Annual Budget 2025/26 2026/27 Movement £m £m £m Expenditure Supervision and Management 20.237 23.200 2.963 Housing Repairs and Maintenance 20.104 21.453 1.349 Grounds and Estates Maintenance 2.159 2.241 0.082 Void Rents 2.355 2.271 (0.084) Bad Debt Provision 2.286 2.371 0.085 Financing Costs (Loan Charges) 13.271 10.240 (3.031) Contribution to Capital Programme 4.934 9.000 4.066 Total Expenditure 65.346 70.776 5.430 Income Rental Income (61.500) (65.514) (4.014) Other Income (4.031) (5.742) (1.711) Use of B/F Reserves 0.185 0.480 0.295 Total Income (65.346) (70.776) (5.430) Net 0.000 0.000 0.000 Page 113 of 118
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PUBLIC Appendix 2 Subjective Summary Proposed Annual Budget 2025/26 Revised Annual Budget 2026/27 Budget Adjustments 2026/27 Explanation of Movement Employees 12,179,000 14,911,000 2,732,000 Includes pay award estimate 2026/27 plus adjustments amounting to £0.376m; £0.100m transfer of funding for money advice posts; increase in funded posts of £1.190m offset by additional income; the reinstatement of employer pension contributions of £1.066m. Premises Related 24,043,490 25,643,100 1,599,610 This includes an additional £0.764m for Repairs & Maintenance inflation as well as £0.585m for employer pension contributions restated in 2026/27 for Building Services; an additional £0.182m for Estate Management which includes £0.100m for Nets team disposal costs; £0.051m for fuel inflation; and net movements in other minor budgets of £0.018m. Transport Related 54,380 56,430 2,050 Movement in budget to reflect inflation and current demand for fleet and mileage. Supplies and Services 943,620 1,006,400 62,780 This reflects inflationary pressures and additional costs mainly on ICT, Communication and external services including legal costs. Transfer Payments 6,733,600 6,696,390 (37,210) The bad debt budget has been increased by £0.137m (net) from last year in line with the anticipated increase in rental income. An allocation of £0.060m has also been made to be utilised for the tenant support fund. A net decrease in the void rent loss budget of (£0.084m) reflects the revised void rent loss targets for 2025/26. A reduction of (£0.022m) is also made for Council Tax payments linked to the anticipated level of reduced voids. A further £0.100m has been added for year 2 of the YouDecide Tenant Fund bringing this years budget to £0.250m. Budget transfer realignments including (£0.100m) to employee costs for money advice; including (£0.100m) to estate management for NETS costs; with the remaining (£0.028m) reflecting realignments offset by the inflationary impact on these budgets. Support Services 3,332,650 3,378,200 45,550 This reflects minor inflationary increases. Depreciation and Impairment Losses 18,205,000 19,240,000 1,035,000 The net increase in the capital financing budget reflects the realignment of this budget to reflect the revised borrowing requirements associated with planned investment. GROSS EXPENDITURE 65,491,740 70,931,520 5,439,780 Income (65,491,740) (70,931,520) (5,439,780) The gross increase in income due to the rent increase budgeted is (£4.014m). The contribution to reserves has increased by £0.295m reflecting the revised rent strategy and reflects a transfer to reserves is forecast. A net movement in capital income reflecting staffing, pension adjustments and on cost of (£1.616m) reflects the recovery of costs for funded posts. An additional (£0.084m) reflects the revised support income received. The balance in the movement of (£0.021m) reflects the net minor movements in other income recoveries. NET EXPENDITURE 0 0 0 Housing Revenue Account - 2026/27 Budget Page 114 of 118
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PUBLIC Housing Capital Investment Plan - 2026/27 - 2030/31 Appendix 3 2026/27 2027/28 2028/29 2029/30 2030/31 5 Year Totals £m £m £m £m £m £m Internal Investment 7,400 12,110 13,100 14,125 15,850 62,585 External Improvements 7,813 13,310 15,665 17,105 19,011 72,904 Multi Storey Flats Improvements 2,300 1,200 7,978 9,430 16,281 37,189 Sheltered Housing Improvements 200 200 610 450 150 1,610 Professional Fees 1,750 1,800 1,950 2,050 2,112 9,662 Others e.g. Adapts, Rotworks & Asbestos 3,460 4,290 3,690 3,948 4,570 19,958 Regeneration and Renewal Investment Programme 11,185 15,121 22,911 35,913 18,457 103,587 New Supply Programme Excluding Regeneration Projects 6,700 7,100 7,900 6,900 1,243 29,843 Capital Expenditure Total 40,808 55,131 73,804 89,921 77,674 337,338 Government Funding (9,702) (2,656) (12,099) (12,270) (14,520) (51,247) Net Housing Investment Expenditure 31,106 52,475 61,705 77,651 63,154 286,091 Expenditure Category Page 115 of 118
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PUBLIC To: Council On: 26 February 2026 Report by: Director of Finance & Resources Heading: Governance Arrangements 1. Summary 1.1 The Labour group has intimated that it wishes to make three changes to its board appointments, firstly that Councillor McDonald be replaced by Councillor Smith on the Infrastructure, Land & Environment Policy Board; Councillor McCulloch be replaced by Councillor Montgomery on the Communities & Housing Policy Board; and Councillor Montgomery be replaced on the Leadership Board by Councillor McCulloch. 2. Recommendations 2.1 That Councillor Smith replace Councillor McDonald on the Infrastructure, Land & Environment Policy Board. 2.2 That Councillor Montgomery replace Councillor McCulloch on the Communities & Housing Policy Board. 2.3 That Councillor McCulloch replace Councillor Montgomery on the Leadership Board. Implications of the Report 1. Financial – none 2. HR & Organisational Development – none 3. Community/Council Planning – none 4. Legal – none Item 6 Page 117 of 118
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PUBLIC 5. Property/Assets – none 6. Information Technology – none 7. Equality & Human Rights - The Recommendations contained within this report have been assessed in relation to their impact on equalities and human rights. No negative impacts on equality groups or potential for infringement of individuals’ human rights have been identified arising from the recommendations contained in the report as it deals with Member appointments to Boards. If required following implementation, the actual impact of the recommendations and the mitigating actions will be reviewed and monitored, and the results of the assessment will be published on the Council’s website. (Report author to arrange this). 8. Health & Safety – none 9. Procurement – none 10. Risk – none 11. Privacy Impact – none 12. CoSLA Policy Position – none 13. Climate change – none 14. Children’s Rights – none List of Background Papers None Author: Mark Conaghan Head of Corporate Governance 0300 300 0287 mark.conaghan@renfrewshire.gov.uk Page 118 of 118