The Financial Strategy Advisory Group met to discuss the council's treasury management performance in 2024/25 and to review initial capital proposals for 2026/27. The group received the report on treasury management performance and prudential indicators for 2024/25. They also provided guidance on which capital schemes should be further developed for consideration in November 2025, with some proposals being combined, deferred, or considered for revenue funding instead.

Initial Capital Proposals 2026/27

The advisory group reviewed the initial capital proposals for 2026/27, providing guidance on which schemes should be worked into detailed proposals for further consideration in November 2025. The report set out 12 proposals with a total investment value of £2.924m, alongside the £974k grant funded Disabled Facilities Grant (DFG) scheme, giving an initial draft capital programme totalling £3.898m.

Members considered each proposal in turn, making the following determinations:

• Epsom Playhouse – Replacement of Auditorium Air Conditioning and controls This was to be progressed to the detailed stage but combined with the Epsom Playhouse - Replacement boilers and controls scheme to come forward as one detailed proposal.
• The Epsom Playhouse – Front of House toilet Refurbishment To be progressed to the detailed stage.
• Epsom Playhouse - Replacement boilers and controls To be progressed to the detailed stage but combined with the Epsom Playhouse – Replacement of Auditorium Air Conditioning and controls scheme to come forward as one detailed proposal.
• Bourne Hall - Replace lift controls To be progressed to the detailed stage.
• Bourne Hall - External Redecorations This was considered revenue as it is maintenance. Members requested that it is considered for inclusion in the 2026/27 Planned Maintenance Programme to be considered by the Strategy & Resources Committee in January 2026.
• Bourne Hall - Replacement of High-level roof covering & insulation To be progressed to the detailed stage.
• Bourne Hall - Bourne Hall Replacement of all heating and ventilation plant/air handling with energy efficient heat pumps This proposal comprised two options, both of which were requested to be progressed to the detailed stage. As part of the detailed proposal, members asked for confirmation as to whether a contribution from Surrey County Council would be available for either scheme.
• Ashley Centre Car Park - Level 5 Replacement of Lamp Columns To be progressed to the detailed stage.
• Ashley Centre multi-storey car park - overcoating waterproof membrane To be progressed to the detailed stage.
• Uppermill pond band replacement - Phase 2 To be progressed to the detailed stage.
• West Ewell allotments - new fencing This was considered as revenue as it is maintenance. Members asked officers to look for revenue funding to enable these works to take place.
• Stew Ponds removal of silt Members did not support this proposal progressing to the detailed stage and requested that the Environment Committee consider releasing the existing committed capital funding of £150k to the main programme to fund higher priorities. This scheme should be reconsidered in the future should external match funding become available.

The advisory group agreed to recommend to the Strategy and Resources Committee that the capital budget for Alexandra Rec Dojo be released back to the capital programme at its January 2026 meeting, as it was understood that the spend to save criteria has now fallen away.

2024/25 Treasury Management Outturn

The Financial Strategy Advisory Group received a report presenting the council's treasury management performance in 2024/25.

The report highlighted that the council earned £1,556,683 in gross interest from its treasury investments, which was down from £1,715,744 in 2023/24. The decrease was attributed to lower average cash balances of £30m in 2024/25, compared to £3.8m lower than the previous year.

At the end of March 2025, the council held £4.8m in money market funds and £15.0m in fixed term deposits, bringing the total treasury investments to £19.8m. The council also had external debt with the Public Works Loans Board of £64.4m, which remained unchanged from March 2024.

Members discussed the following issues:

• The purpose of the interest equalisation reserve and whether its current level is appropriate.
• The impact of falling interest rates and cash balances on treasury management income, as well as the amount of treasury management income budgeted for within the 2025/26 budget.
• The nature of the council's cashflow, including peaks and troughs, and how this influences the way in which the council utilises different forms of investments, such as fixed-terms deposits, money market funds, and its interest-bearing account.
• How the Treasury Management Strategy governs how officers can invest council funds.
• The drop in the level of investments from £23.2m in March 2024 to £19.8m in March 2025, and how this can be seen in the decrease in the balance of useable reserves in the council's 2024/25 Statement of Accounts.

The advisory group agreed to:

(1) Receive the report on the Council's treasury management performance in 2024/25;

(2) Receive the 2024/25 prudential indicators.

The Treasury Management Strategy sets out the strategy and procedures for managing the council's cash flow. The council's prudential indicators¹ must be received by a committee of members, in accordance with the Chartered Institute of Public Finance and Accountancy's (CIPFA) Code of Practice for Treasury Management in the Public Sector.