Decision Maker: Cabinet

Outcome: For Determination

Is Key Decision?: Yes

Is Callable In?: Yes

Date of Decision: April 1, 2025

Purpose: The report sets out the required long-term external borrowing that Newham will be required to undertake during 2025/26 to finance the 2025/26 capital programme and to replace existing internal and temporary borrowing. The total borrowing required will be ‘up to’ £504m.   The decision required is to delegate approval to the Corporate Director of Resources to enter into new long-term borrowing ofup to £504m to fund the estimate borrowing requirement during 2025/26   What is being delegated is the execution of the borrowing transaction, specifically: the type, period, rate and timing of new borrowing. These will be determined by the Corporate Director of Resources officer under delegated powers, taking into account the following factors: Expected movements in interest rates as outlined above Maturity profile of the debt portfolio show little new borrowing will be required to replace maturing long term debt The impact on the Budget strategy; and Prudential Indicators and limits.  

Content: Decision   For the reasons set out in the report and its appendices Cabinet RESOLVED to Agree:   i)  To authorise the Corporate Director of Resources to enter into new long-term borrowing of up to £454m that will fund the estimated borrowing requirement in  2025/26.   Alternatives Considered   a)  Not to agree a long-term borrowing mandate will mean reliance on temporary borrowing to finance the approved capital programme. As set out in the financial implications, the bank rate level, is currently higher than the loan rate for longer durations (up to 5 years) which have already discounted a falling bank rate. This would potentially increase the amount of interest payable in 2025/26. However, long-term borrowing spreads and hence reduces risk as placing too much reliance on temporary borrowing exposes the Council to market interest rate and liquidity volatility when there is no PWLB back stop available for temporary borrowing. It also imposes pressure on staff resources having to turnover large volumes of temporary debt.