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The decisions as the council's minutes record them. A plain-language summary follows once it has been written.
RESOLVED: 1. To scrutinise and comment on the information provided; and 2. To consider whether they wish to receive further detail on any matters contained in the report.
In accordance with the Council’s Code of Conduct, there were no declarations made pertaining to the agenda.
The Chair took the opportunity to welcome County Borough Councillor S Bradwick to the Governance and Audit Committee and noted the Councillor’s previous membership and experience on the Committee. The Chair took the opportunity to inform the Committee that he and the Vice-Chair had attended the Governance and Audit Committee Chairs’ Annual Network on 2nd October 2026. The Chair was of the view that the event had provided reassurance that RCT Council’s Governance and Audit Committee arrangements were aligned with good practice and that the authority was addressing the key issues facing local government. Members were informed that the conference had been opened by the new Auditor General for Wales, who highlighted the importance of vigilance in governance matters and noted that governance failures often arise through a gradual erosion of standards rather than a single significant event. Emphasis was placed on the Committee’s role in objectively scrutinising evidence and ensuring that information received from officers was consistent with the wider context of the Council’s operations. The Chair further reported that delegates had been encouraged to focus on three key areas: maintaining oversight of the wider strategic picture, providing robust and ambitious challenge, and preparing for the next Council term, including ensuring effective member induction on governance and financial responsibilities following the local government elections.
Decision as recorded
RESOLVED: 1. To scrutinise and comment on the information provided; and 2. To consider whether they wish to receive further detail on any matters contained in the report.
The Service Director – Finance Services presented the Governance and Audit Committee with the Annual Treasury Management Review report, which had been presented to Council at its meeting on 23rd September 2026. The Service Director provided an overview of the key information set out in the report and confirmed that the Council had complied with all relevant Codes of Practice, regulations and guidance, and that the Council continues to adopt a low-risk strategy in terms of investing and borrowing. It was noted that all Elected Members had been invited to a training session, delivered by Arlingclose, prior to the meeting of the Governance and Audit Committee. It was also noted that Treasury Management is defined as the management of the Council’s cash flow, borrowing and investment activities, together with the management of the associated risks, and that appropriate emphasis is placed on effective risk management whilst seeking to achieve optimum performance and returns that are consistent with the Council’s risk appetite and treasury management objectives. The Chair thanked the Service Director for the report and referring to the Council's low-risk approach to borrowing and investments, the Chair sought clarification on the rationale for maintaining this policy. In response, the Service Director explained that the approach had been adopted following the 2008 world-wide financial crisis, after which the Council took the decision to invest primarily with other public bodies and the Debt Management Office to prioritise security and liquidity over yield to minimise risk. It was noted that although a low-risk investment strategy is in place, the Council continues to achieve favourable returns on its investments when benchmarked against comparable organisations. It was emphasised that the effective management of risk remains a key principle underpinning all treasury management activities. One Member noted that no long-term borrowing had been undertaken during 2025/26 and asked whether this had affected the Council’s ability to deliver its capital programme and essential infrastructure projects. The Service Director advised that the decision to not undertake long-term borrowing had not impacted the delivery of capital projects as, wherever possible, the Council meets its borrowing requirement through internal borrowing, using available cash balances to finance expenditure. This approach reduces external interest costs and limits exposure to counterparty risk that is an inherent risk when investing surplus funds. It was also explained that minimising cash balances and utilising internal borrowing, where appropriate, supports effective risk management and is in line with the Council’s approved Treasury Management Strategy. A Member sought clarification on whether the Council’s loans were subject to fixed interest rates for the duration of the loan term and whether consideration had been given to the risk of future interest rate increases. It was confirmed that the Council’s current loans are held at fixed interest rates for the term of the borrowing and it was noted that variable-rate borrowing could be considered where market conditions make it advantageous to do so, for example, in circumstances where long-term fixed-rate borrowing is expensive, the Council may utilise shorter-term variable-rate borrowing and subsequently refinance with longer-term fixed-rate debt when interest rates become more favourable. It was reiterated that the Council’s current strategy of maximising internal borrowing remains the most appropriate approach at present. The Vice-Chair queried a figure presented in Table 8 of the report, noting that the reported average interest earned of £3.340M on the cash balance of £86.206M appeared to indicate a return of approximately 3.87%, which differed slightly from the figure shown in the table. The Vice-Chair requested clarity on whether the variance could be attributed to factors such as the use of daily balances or different investment categories. The Service Director advised that this will be reviewed and feedback provided to the Member following the meeting. The Vice-Chair referred to the anticipated borrowing requirement of £56.1M for the Sustainable Communities for Learning Programme and noted that scheme costs would not be confirmed until procurement processes and approvals had been completed. The Member sought assurance regarding the risk of cost increases or reductions in grant funding, and clarification on how such risks were monitored and managed. Officers fed back that the Council’s capital programme expenditure is closely monitored on an on-going basis and updates reported to Welsh Government. It was also fed back that the financial implications of the Sustainable Communities for Learning Programme are built into the Council’s medium term financial planning arrangements and, as part of this, opportunities to maximise external grant funding are taken to minimise the actual level of borrowing required by the Council and manage the risk of cost increases. A Member sought clarification regarding the Goods Yard car park in Pontypridd in terms of whether the Council now owned the entire site, to which it was confirmed that the Council now owns the full car park. The Member further enquired about the revenue generated from this area and it was advised that the Council receives income from a lease in place and it was noted that the financial information included within the lease is commercially sensitive. A Member welcomed the positive Treasury Management report, noting that activities had been delivered within budget and approved parameters. The Member sought assurance that, despite current economic and geopolitical uncertainty, the Council was taking a sufficiently long-term view to maintain its strong financial position and ensure continued stability in future years. In response, Members were assured that treasury management is focused on the longer-term and it was explained that the Prudential Code requires the Council to forecast treasury management indicators for both the current year and future years, ensuring that long-term financial sustainability remains under review. The Service Director highlighted the importance of monitoring the debt maturity profile to avoid excessive borrowing maturing within a short period, thereby reducing the risk of having to refinance at unfavourable interest rates. Members were also informed that treasury management activities and associated capital financing costs are incorporated into the Council’s Medium Term Financial Plan, with any changes reported via robust budget planning processes and subject to scrutiny. The Chair thanked officers for the assurance and the Governance and Audit Committee RESOLVED: 1. To scrutinise and comment on the information provided; and 2. To consider whether they wish to receive further detail on any matters contained in the report.
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