Appendix 2 TM Prudential Indicators - 10.03.2026
In plain English
Noted · Received for information; no decision followed.
Cash investment balances fell by 58% in a year, from £114.2m at Q3 2024/25 to £57.1m at 31 December 2025. p4
The average investment return over Q3 was 4.24%, above the benchmark rate by 0.31 percentage points. p4
The Capital Financing Requirement is now expected to need new borrowing of £113.110m by the end of the year, against an original estimate of £70.000m, though only £38.110m of external borrowing is expected to be needed once internal borrowing is taken into account. p15
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- p4Cash investment balances as at 31 December 2025 have fallen by 58% in one year, from £114.2m at Q3 2024/25 to £57.1m. The average investment return over Q3 was 4.24% performing above the benchmark rate by 31 basis points (or 0.31 percentage points). Performance has reduced marginally because of maturing investments being placed in a lower interest rate environment and for a shorter duration, due to cashflow.
- p15215.142 4.38% The table below shows the Q3 forecast of the Capital Financing Requirement (CFR) compared to the estimate within the 2025/26 strategy approved in February 2025. The CFR is expected to give rise to new borrowing required of £113.110m by the end of the year, compared to the original estimate of £70.000m following an increased capital programme borrowing need in 2024/25 carried forward. The strategy currently forecasts that the level of reserves and balances in the medium term allows for internal borrowing (using internal resources such as useable reserves or temporary working capital) of at least £75.000m in 2025/26. It is therefore expected that new borrowing of £38.110m may be required to support the capital programme during 2025/26, although the timing of borrowing will be considered in the context of the wider treasury management position and economic environment.