9. Treasury Management and Investment Mid-Year Report 25-26
North Ayrshire Council · 28 October 2025
Back to Cabinet — 28 October 2025 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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NORTH AYRSHIRE COUNCIL 28 October 2025 Cabinet Title: Treasury Management and Investment Mid-Year Report 2025/26 Purpose: To provide Cabinet with a Treasury Management update for the period 1 April to 30 September 2025 Recommendation: That Cabinet agrees to (a) endorse the contents of the Treasury Management and Investment Mid-Year Report for 2025/26 (Appendix 1); and (b) note the Prudential and Treasury Indicators contained therein. 1. Executive Summary 1.1 The Treasury Management and Investment Strategy and treasury management indicators provide a framework for the Council's treasury activities to ensure the effective control of the risks associated with those activities and the pursuit of optimum performance consistent with those risks. 1.2 This mid-year review report: • provides an update on performance to 30 September 2025; • updates the annual prudential indicators to reflect the latest information available to the Council; • demonstrates that the treasury management activities carried out during the period 1 April to 30 September 2025 have been consistent with the Treasury Management and Investment Strategy 2025/26 and have complied with the treasury management indicators set out in the Strategy. 2. Background 2.1 The Chartered Institute of Public Finance and Accountancy’s Treasury Management in the Public Services: Code of Practice 2021 Edition (the CIPFA Code) requires that Elected Members are provided with regular monitoring reports on treasury management activities. The Treasury Management Strategy for 2025/26 was approved by Council on 26 February 2025.
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This report is the Mid-Year Report, providing Cabinet with an update on treasury management activities for the period 1 April to 30 September 2025. An annual report on the treasury management activities for the year will be presented to Council following the end of the financial year. These reports ensure that the Council is meeting best practice in accordance with CIPFA's Code of Practice. 2.2 The 2025/26 Mid-Year Report is attached at Appendix 1 and covers: • Prudential and treasury indicators; • Borrowing and associated rates; and • Investments and associated rate of return. 2.3 This report provides an update on performance to 30 September 2025 and the annual prudential indicators to reflect the latest information. It is a statutory duty for the Council to determine and keep under review its approved borrowing limits and prudential indicators. Details within the report demonstrate that, during the period 1 April to 30 September 2025, the Council has operated within the authorised and operational limits and prudential indicators as set out in the Council's 2025/26 Annual Treasury Management Strategy Statement (TMSS). 2.4 The Executive Summary of the Mid-Year Report provides a high level overview of treasury management and performance, with more detail provided in the body of the report. Key points to note are: • changes in the profile of capital projects have had an impact on all of the prudential indicators; • PWLB interest rates have remained relatively steady during the period in both the long and short term. • during the year to date the Council has not undertaken any borrowing. The Council continues to utilise internal short-term cash reserves to minimise borrowing costs; and • investment returns are in line with target and this is reflective of the Bank of England base rate which reduced from 4.5% to 4% during the period April to September 2025. 3. Proposals 3.1 It is proposed that Cabinet (a) endorse the contents of the Treasury Management and Investment Mid-Year Report for 2025/26 (Appendix 1); and (b) note the Prudential and Treasury Indicators contained therein.
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4. Implications/Socio-economic Duty Financial 4.1 General Services Capital Financing Costs - the Council budgeted £23.514m for financing costs and expenses on debt for 2025/26. It is currently estimated that actual costs will total £13.854m. This underspend will be transferred to the Loans Fund Reserve in line with the previously agreed policy to support delivery of the capital investment programme. Housing Revenue Account Capital Financing Costs - the Council budgeted £17.228m for financing costs and expenses for debt in 2025/26. It is currently estimated that actual costs will total £15.027m. The main reason for the underspends is the current strategy to utilise cash balances, resulting in savings on interest costs. These funds will be required to support the HRA capital programme in future years Human Resources 4.2 None. Legal 4.3 None. Equality/Socio-economic 4.4 None. Climate Change and Carbon 4.5 None. Key Priorities 4.6 This report directly supports the Council Plan 2023 to 2028 by focusing our investment on priorities, managing risk and supporting delivery of key priorities. Community Wealth Building 4.7 None. Islands Communities Impact Assessment (ICIA) 4.8 None. United Nations Rights of the Child (UNCRC) 4.9 None. Consumer Duty 4.10 None.
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5. Consultation 5.1 The Council's treasury advisors, Arlingclose Ltd, were consulted in the preparation of this report. Mark Boyd Head of Service (Finance) For further information please contact David Forbes, Senior Manager (Strategic Business Partner), on 01294 324551. Background Papers Treasury Management and Investment Strategy 2025/26 – Council 26 February 2025
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Treasury Management and Investment Mid-Year Report 2025/26
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2 Contents 1. Purpose 3 2. Executive summary 4 3. Prudential and treasury indicators 6 a. The Council’s Capital expenditure and financing 2025/26 6 b. The Council’s overall borrowing need 7 c. Limits to borrowing activity 8 d. Treasury position at 30 September 2025 9 e. Affordability PIs 13 4. Investment rates in 2025/26 13 5. Investment position for 2025/26 14
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3 Treasury Management and Investment Mid-Year Review 2025/26 1. Purpose The Council is required by regulations issued under the Local Government in Scotland Act 2003 and the Chartered Institute of Public Finance and Accountancy’s (CIPFA) Code of Practice on Treasury Management (revised 2021) to produce a mid-year review of treasury management activities. The purpose of this mid-year review is to report the performance of the Council’s treasury operation and how this measures up against the Council’s Treasury Management and Investment Strategy. This is done through the publication of updated prudential and treasury indicators for 2025/26. This report meets the requirements of both the CIPFA Code of Practice on Treasury Management (the Code) and the CIPFA Prudential Code for Capital Finance in Local Authorities (the Prudential Code). During 2025/26, to meet the minimum reporting requirement, the following reports should be submitted to Elected Members: • an annual treasury management and investment strategy (submitted to the Council on 26 February 2025) • the capital strategy (submitted to the Council on 26 February 2025) • a mid-year treasury update report (this report) • an annual review following the end of the year describing the activity compared to the strategy (will be submitted to Council in June 2026) Regulations place responsibility on members for the review and scrutiny of treasury management policy and activities. This report is, therefore, important in that respect, as it provides details of treasury activities for the six months to 30 September 2025 and highlights performance against the Council’s policies previously approved by members.
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4 2. Executive Summary During the six month period to 30 September 2025, the Council complied with its legislative and regulatory requirements. The key prudential and treasury indicators for 2025/26 have been updated based on the latest available information and will be used to assess performance at the end of the year. TABLE 1 A summary of performance is provided below with more detailed information provided in the body of the report. Capital Expenditure for both the General Fund and HRA vary from original estimates due to changes in the profile of projects. Full details of all movements in the capital expenditure budgets are included in the capital programme performance reports submitted to Cabinet throughout the year. The Capital Financing Requirement (CFR) is the underlying borrowing requirements of the Council. The reduction to the requirement during 2025/26 reflects the change in profile of the capital programme. Gross Borrowing reflects the actual borrowing which has been undertaken. This is projected to be higher than anticipated due to the revised profile of capital projects. The Operational Boundary is the maximum we would anticipate borrowing to fund the current year capital programme building in flexibility for the timing of the different funding streams and principal repayments. The in-year variance is linked to the re-profiling of the capital programme. The Authorised Limit is set at 10% above the Operational Boundary to give some flexibility to raise funds for future year capital investment. 2025/26 2025/26 Original Estimate Revised Estimate £m £m 95.807 94.506 46.003 46.832 141.810 141.338 387.496 362.811 224.461 217.321 611.957 580.132 556.653 558.132 625.593 594.114 688.153 653.525 - - 30.000 61.650 30.000 61.650 · Total Operational Boundary (Indicator 5) Authorised Limit (Indicator 6) Investments (Indicator 8) · Longer than 1 year · Under 1 year Capital Financing Requirement (CFR): · Non-HRA · HRA · Total Gross borrowing (Indicator 4) Capital expenditure (Indicator 1) · Non-HRA · HRA · Total Prudential and treasury indicators
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5 The Council has a strategy of taking a combination of temporary and permanent borrowing in recognition of the Council’s longer term borrowing requirements and the market rates available at that time. This balances short term financial savings with longer term security of costs. During the period 1 April to 30 September 2025 the Council did not undertake any borrowing. Affordability of borrowing is measured by a number of indicators, including the impact of: • Percentage of financial costs relative to the net revenue stream of the General fund and Housing Revenue Account. As at 30 September 2025 the above indicator shows estimated ratios of 3.7% and 26.4% for General Fund and HRA respectively. Capital expenditure impacts on the revenue budget through financing charges so it is essential the Council ensures the financing costs remain affordable and do not constitute an excessive proportion of the revenue resources available. From a General Fund perspective, the latest Scottish Local Authority average was 5.8%, therefore demonstrating a prudent borrowing policy. For the HRA, the latest Scottish average was 20.0%. The level of loan charges is deemed prudent and affordable within the framework of the 30-year Housing business plan. The average investment rate to 30 September 2025 was 4.25%, compared to a target of 4.25% and actual in 2024/25 of 4.74%. The return secured this year to date reflects the Bank of England base rate which has reduced from 4.5% in April 2025 to 4% in August 2025. The Council’s objective when investing money is to strike an appropriate balance between risk and return, minimising the risk of incurring losses from defaults and the risk of receiving unsuitably low investment income. Other prudential and treasury indicators and supporting information can be found in the main body of this report. Conclusion The Head of Finance confirms that long-term borrowing is only undertaken for a capital purpose and the statutory borrowing limit (the authorised limit) has not been breached.
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6 3. Prudential and Treasury Indicators for 2025/26 The Prudential Code establishes a framework to ensure Councils demonstrate effective control over levels of, and decisions relating to, capital investment activity including borrowing. The Treasury indicators are used to ensure that risk is managed and controlled effectively. Together the Prudential and Treasury Indicators consider the affordability and impact of capital expenditure decisions and set out the Council’s overall capital framework. These indicators help the Council to demonstrate public accountability in relation to borrowing and investments. As part of this accountability this report will summarise the following: - • Capital activity during the year (section a); • Impact of this activity on the Council’s underlying debt (the Capital Financing Requirement) (section b); • The actual prudential and treasury indicators (section a – e); • Overall treasury position identifying how the Council has borrowed in relation to this debt, and the impact on investment balances (section e); • Detailed debt activity (section e); and • Summary of interest rate movements in the year (section 4); • Detailed investment activity (section 5). (a) The Council’s Capital Expenditure and Financing 2025/26 (Prudential Indicator 1) The Council incurs capital expenditure when it invests in its long term assets. Capital Expenditure can be funded in two main ways: • Financed immediately through the application of capital or revenue resources (capital receipts, capital grants, revenue contributions etc.), which has no resultant impact on the Council’s borrowing need; or • If insufficient financing is available, or a decision is taken not to apply other resources, the capital expenditure will give rise to borrowing, which is approved as part of the Council’s investment plans. The tables below show the planned capital expenditure for 2025/26 and the latest forecast, alongside the amount estimated to be financed in year and the amount which will give rise to borrowing. TABLE 2 2025/26 2025/26 Original Estimate Revised Estimate £m £m 95.807 94.506 41.344 45.445 54.463 49.061 2025/26 2025/26 Original Estimate Revised Estimate £m £m 46.003 46.832 19.896 19.896 26.107 26.936 Capital expenditure (Indicator 1) Financed in year from external funding and reserves Unfinanced capital expenditure Capital expenditure (Indicator 1) Financed in year from external funding and reserves Unfinanced capital expenditure HRA General Fund
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7 (b) The Council’s Overall Borrowing Need (the Capital Financing Requirement) (Prudential Indicators 2 and 3) This indicator outlines the Council’s Capital Financing Requirement (CFR). The CFR is simply the total historic outstanding capital expenditure which has not been paid from either a capital or revenue resource and therefore needs to be funded from borrowing. It is essentially a measure of the Council’s underlying borrowing need. Part of the Council’s treasury activity is to meet the funding requirements for this borrowing need. The treasury management section organises the Council’s cash position to ensure that sufficient cash is available to meet the capital plans and cash flow requirements. This may be sourced through borrowing from external bodies (such as the Government through the Public Works Loan Board [PWLB] or the money markets), by utilising temporary cash resources within the Council or through temporary borrowing from other local authorities. The Council’s underlying borrowing need (CFR) is not allowed to rise indefinitely. The Council is required to make an annual revenue charge, called the Loan Fund Principal Repayment. This is effectively a repayment of the borrowing need and it is charged to revenue over the life of the asset. This charge reduces the CFR each year. This differs from the treasury management arrangements which ensure that cash is available to meet capital commitments. External debt can also be borrowed or repaid at any time, but this does not change the CFR. The total CFR can also be reduced by: • the application of additional capital financing resources (such as unapplied capital receipts); or • increasing the annual revenue charge The Council’s CFR for the year is shown in the following table and is a key prudential indicator. The opening balance excludes the PPP / NPD schemes because no borrowing is actually required against these schemes, as a borrowing facility is included in the contract. Table 3 shows that, based on historic capital expenditure and this year’s capital expenditure, the Council has a cumulative underlying borrowing need of £580.132m forecast at 31 March 2026. This is lower than the original estimate largely as a result of changes in the profile of capital projects. TABLE 3 2025/26 2025/26 Original Estimate Revised Estimate £m £m 541.275 513.670 80.570 75.997 (9.888) (9.535) 611.957 580.132 70.682 66.462 Less Loans Fund Principal Repayments Closing balance (Indicator 2) Annual Change (Indicator 3) CFR Opening Balance Add unfinanced capital expenditure (General Fund and HRA per Table 2)
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8 c) Limits to Borrowing Activity (Prudential Indicators 4 - 6) Borrowing activity is constrained by the prudential indicators for CFR, gross borrowing and by the authorised limit to ensure the Council operates its activities within well-defined limits. Gross borrowing and the CFR There is a need to ensure that gross debt does not, except in the medium term, exceed the total CFR (i.e. the Council does not borrow more than it needs to fund its capital programme). In exceptional circumstances Councils are allowed to borrow to cover the current financial year plus the next two financial years (i.e. to 2027/28). This provides some flexibility to borrow in advance where this is appropriate. Table 4 highlights the Council’s forecast gross borrowing position against the CFR and confirms that at 30 September 2025 the Council has complied with this prudential indicator as gross borrowing is currently within its CFR. The Council is currently under-borrowed by £163.798m due to the continuing strategy to delay long-term external borrowing by utilising internal cash balances. TABLE 4 As part of its annual Treasury Management and Investment Strategy the Council sets limits for external borrowing which it is not normally expected to exceed. These limits are explained below. The Operational Boundary The operational boundary is the expected maximum borrowing position of the Council during the year, taking account of the timing of various funding streams and the recharge of principal repayments from the revenue account. Periods where the actual position varies from the boundary is acceptable subject to the authorised limit not being breached. The Authorised Limit The authorised limit represents a limit beyond which external debt is prohibited. Performance against the approved strategy is monitored throughout the year and reported to Cabinet as appropriate. However, ultimate responsibility for setting or adjusting this limit lies with full Council. The current limit is set at 10% of the Operational Boundary. Table 5 demonstrates that between 1 April and 30 September 2025 the Council’s gross borrowing was within both the operational boundary and its authorised limit, by a significant margin due to the continuing strategy to delay new external borrowing by utilising internal cash balances and changes in the capital programme that have resulted in a reduced borrowing requirement. 2025/26 2025/26 30 September 2025 Original Estimate Revised Estimate Actual £m £m £m Gross borrowing position (Indicator 4) 556.653 558.132 416.334 CFR 611.957 580.132 580.132 (Under)/Over Borrowed Position (55.304) (22.000) (163.798)
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9 TABLE 5 (d) Treasury Position at 30 September 2025 (Prudential Indicators 7 - 11) The Council’s debt and investment position is organised by the treasury management service to ensure adequate liquidity for revenue and capital activities, security for investments and to manage risks within agreed parameters. Procedures and controls to achieve these objectives are well established through both Member reporting and the Council’s Treasury Management Practices. Borrowing Strategy for 2025/26 The Borrowing Strategy for 2025/26 anticipated bank interest rates declining in 2025 before settling at 3.75%. Fixed borrowing rates were anticipated to remain steady. Variable, or short-term rates, were expected to be the cheaper form of borrowing over the period. Continued economic uncertainty has promoted a cautious approach, whereby investments continue to be dominated by low counterparty risk considerations, resulting in relatively low returns compared to borrowing rates. During the period April to September, UK gilt yields have increased amid concerns about inflation, the UK government’s fiscal position and general economic uncertainty. The PWLB certainty rate for 10- year maturity loans was 5.38% at the beginning of the period and 5.53% at the end. The lowest available 10-year maturity certainty rate was 5.17% and the highest was 5.62%. Rates for 20-year maturity loans ranged from 5.71% to 6.30% during the period, and 50-year maturity loans from 5.46% to 6.14%. The cost of short-term borrowing from other local authorities has been similar to the Base Rate during the period at 4.0% to 4.5%. The PWLB HRA rate which is 0.4% below the certainty rate remains available up to March 2026. This discounted rate is to support local authorities borrowing for the Housing Revenue Account and for refinancing existing HRA loans. The Council has not borrowed at the HRA rate between April and September 2025. As a result of the higher borrowing rates, the Council’s current strategy is to use internal funds instead of borrowing. The following graph demonstrates that PWLB rates have remained relatively steady during the period April to September 2025. Estimated Revised £m £m 419.980 429.101 625.593 594.114 688.153 653.525 Operational boundary per Treasury Strategy 2025/26 (Indicator 5) Authorised limit per Treasury Strategy 2025/26 (Indicator 6) Average gross borrowing position 1 April to 30 September 2025 Maximum gross borrowing position 1 April to 30 September 2025
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10 CIPFA’s 2021 Prudential Code is clear that local authorities must not borrow to invest primarily for financial return and that it is not prudent for local authorities to make any investment or spending decision that will increase the capital financing requirement, and so may lead to new borrowing, unless directly and primarily related to the functions of the Council. Local authorities can borrow from the PWLB provided they can confirm they are not planning to purchase ‘investment assets primarily for yield’ in the current or next two financial years, with confirmation of the purpose of capital expenditure from the Section 95 Officer. Authorities that are purchasing or intending to purchase investment assets primarily for yield will not be able to access the PWLB except to refinance existing loans or externalise internal borrowing. The Council is not planning to purchase any investment assets primarily for yield within the next three years and so is able fully access the PWLB. Borrowing Position for 2025/26 To date in 2025/26, the Council has not undertaken any borrowing. The Council continues to utilise internal short-term cash reserves to minimise borrowing costs. In terms of outlook for the remainder of the year, based on current capital plans and replacement borrowing requirements, it is estimated that the Council will borrow £113.903m this financial year, with a forecasted planned under borrowed position of £22.000m at the end of March 2025. Loans Restructuring No rescheduling has taken place between 1 April 2025 and 30 September 2025. The continuing rise in gilt yields since early 2022 may result in some of the Council’s PWLB loans being in or close to a discount position if repaid early. The Council continues to monitor the position.
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11 LOBO Loans The Council has £18.350 of LOBO loans with call dates within the next 12 month. The Council has liaised with its treasury management advisors, Arlingclose, over the likelihood of the options being exercised. If the option is exercised and an increased rate proposed, the Council currently plans to repay the loan at no additional cost as accepting the revised terms would mean the Council would still have refinancing risk in later years. If applicable, the Council will repay the LOBO loans with available cash or by borrowing, either from other local authorities or from the PWLB. A £5.6m LOBO loan was called and repaid in May 2025. The Council’s treasury position (excluding borrowing by PPP/NPD and finance leases) at the 31 March 2025 and 30 September 2025 was as follows: TABLE 6 All investments at 30 September 2025 mature within one year, with the exception of one which matures in 2027, in line with the Treasury Management and Investment Strategy (Indicator 9). The Liability Benchmark compares the Council’s actual existing borrowing against a liability benchmark that has been calculated to show the lowest risk level of borrowing. The liability benchmark is an important tool to help establish whether the Council is likely to be a long-term borrower or long-term investor in the future, and so shape its strategic focus and decision making. It represents an estimate of the cumulative amount of external borrowing the Council must hold to fund its current capital and revenue plans while keeping treasury investments at the minimum level of £10m required to manage day-to-day cash flow. Following on from the medium-term forecasts in the table above, the long-term liability benchmark assumes capital expenditure funded by borrowing will be in line with the 10-year capital plan and 30-year HRA business plan respectively, loans fund advances on new capital expenditure based on asset life and income, expenditure and reserves all increasing by inflation of 2.5% a year with any specific adjustments made for planned use of reserves. This is shown in the following chart together with the maturity profile of the Council’s existing borrowing: 31 March 2025 30 September 2025 Principal Rate/ Return Principal Rate/ Return £m % £m % Fixed rate funding: -PWLB 372.392 4.84% 369.171 4.85% -Other Local Authorities 21.291 4.90% 17.599 3.01% -Market 1.244 10.29% 1.214 10.55% Variable rate funding: -Market 33.950 5.26% 28.350 5.36% Total debt (Indicator 7) 428.877 4.89% 416.334 4.82% CFR 513.670 580.132 Over / (under) borrowing (84.793) (163.798) Investments: - internally managed 75.653 4.74% 61.650 4.25% Total investments (Indicator 8) 75.653 61.650 2024/25 2025/26 2026/27 2027/28 Actual £m Estimate £m Forecast £m Forecast £m Loans CFR 513.7 580.1 718.3 797.8 Less Balance sheet resources (157.9) (110.1) (95.2) (80.9) Net loans requirement 355.8 470.0 623.0 716.9 Liquidity allowance 10.0 10.0 10.0 10.0 Liability Benchmark 365.8 480.0 633.0 726.9 Existing Borrowing (428.8) (395.5) (387.5) (381.1) Liability Benchmark
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12 The maturity structure of the debt portfolio (Indicator 10) at 30 September 2025 is shown below and shows the period when the Council is required to repay and/or refinance debt. It is important to ensure a reasonable spread of debt to mitigate against high exposure levels in respect of refinancing. The current profile ensures this: TABLE 7 The next indicator is used to manage risk and reduce the impact of adverse movement in interest rates. This sets a limit on the Council’s exposure to fixed and variable interest rates (Indicator 11). The Council approved a limit on variable borrowing of £60.000m in the Treasury Management Strategy 2025/26. TABLE 8 31-Mar-25 30 September 2025 Actual Actual £m £m 44.954 40.351 4.917 6.472 42.049 49.321 102.667 98.343 115.778 103.335 15.925 15.925 92.587 92.587 - - 10.000 10.000 428.877 416.334 50 years and above Total Borrowing 5 years and within 10 years 10 years and within 20 years 20 years and within 30 years 30 years and within 40 years 40 years and within 50 years Maturity Profile of Borrowing (Indicator 10) Under 12 months 12 months and within 24 months 24 months and within 5 years 2025/26 30 September 2025 Original Limits Actual £m £m 688.153 653.525 60.000 28.350 Limits on fixed interest rates based on net debt (Indicator 11) Limits on variable interest rates based on net debt (Indicator 11)
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13 (e) Affordability Prudential Indicators (Prudential Indicator 12 - 14) These Prudential Indicators assess the affordability of capital investment plans and provide an indication of the impact of capital investment plans on the Council’s overall finances. The cost impact of borrowing decisions is reflected in the Council’s budget as loan charges. The actual and estimates of the ratio of financing costs to net revenue stream indicator identifies the trend in the cost of capital (borrowing and other long-term liabilities net of investment income) against the net revenue stream. TABLE 9 Capital expenditure impacts on the revenue budget through financing charges so it is essential the Council ensures the financing costs remain affordable and do not constitute an excessive proportion of the revenue resources available. From a General Fund perspective, the latest Scottish Local Authority average was 5.8%, thereby demonstrating a prudent borrowing policy. For the HRA, the latest Scottish average was 20.0%. The level of loan charges is deemed prudent and affordable within the framework of the 30-year Housing business plan. 4. Investment Rates in 2025/26 The Bank Rate has reduced from 4.5% to 4% during the period April to September. The Council’s treasury advisers, Arlingclose, currently project that the bank rate will steadily fall taking Bank Rate down to around 3.75% by the end of 2025. 2025/26 2025/26 Original Estimate Revised Estimate £m £m 4.1% 3.7% 26.5% 26.4% Estimate of ratio of financing costs to net revenue stream (Indicator 14) General Services HRA
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14 5. Investment Position for 2025/26 Investment Policy The Council’s investment policy is governed by Scottish Government investment regulations, which have been implemented in the annual treasury management and investment strategy, approved by Council on 26 February 2025. This policy sets out the approach for choosing investment counterparties, based on credit ratings provided by the three main credit rating agencies and supplemented by additional market data (such as rating outlooks, credit default swaps, bank share prices etc.). All investments during 2025/26 have complied with our investment policy. Resources The Council’s cash balances comprise revenue and capital resources and cash flow monies. The Council’s cash resources at 30 September 2025 were as follows: TABLE 10 Investments held by the Council The Council has maintained an average balance of £68.939m of invested funds and utilised cash balances during the year in support of the under-borrowed position. The Council’s treasury management advisors, Arlingclose Limited, have five Scottish unitary authorities in their client group and provide regular investment benchmarking information to the Council. North Ayrshire Council’s average weighted rate of return on investments during the period 1 April 2025 to 30 September 2025 was 4.25% (5.12% for the period to 30 September 2024). The actual rate of return on investments as at 30 September for North Ayrshire Council was 4.08%. Benchmarking information, comparing the Council’s performance with the other Scottish Unitary authorities within the client group of Arlingclose, as at 30 September has not currently been published and will be presented as part of the annual review report to Council in June 2026. The target investment rate for 2025/26 was 4.25% and the weighted average is currently in line with this which reflects the Bank of England base rate reducing from 4.5% to 4% during the period April to September 2025. We will continue to invest with approved counterparties in accordance with the approved strategy. 2025/26 Actual £m 75.653 61.650 (14.003) 1 April 2025 30 September 2025 Change within 6 months Cash Balances