This indicator compares the net interest payable less investment income receivable to the overall net revenue spending of the council. Because the council has a high level of investment income and lower level of borrowing this indicator is negative and remains so throughout the period.
Indicator A-1 |
2024/25 |
2025/26 |
2026/27 |
2027/28 |
2028/29 |
Ratio of financing costs to net revenue stream |
estimate |
estimate |
estimate |
estimate |
estimate |
Non – HRA |
(30.6%) |
(17.2%) |
(16.0%) |
(15.0%) |
(13.8%) |
1.2 Net income from commercial investments to net revenue stream
This indicator estimates the proportion of its commercial investment income to its net revenue stream, as an indicator of the council’s exposure to risk in relation to the potential loss of commercial investment income.
Indicator A-2 |
2024/25 |
2025/26 |
2026/27 |
2027/28 |
2028/29 |
Ratio of net income from commercial investments to net revenue stream |
estimate |
estimate |
estimate |
estimate |
estimate |
Non – HRA |
3.0% |
3.2% |
3.1% |
4.0% |
4.0% |
It is prudent to ensure that borrowing is only used to fund capital (as opposed to revenue) expenditure. The indicator to measure whether this is achieved is to demonstrate that external borrowing does not, except in the short term, exceed the total of capital financing requirement in the preceding year plus the estimates of any additional capital financing requirement for the current and next two financial years.
Indicator P-1 |
2022/23 |
2023/24 |
2024/25 |
2025/26 |
2026/27 |
|
|
actual |
estimate |
estimate |
estimate |
estimate |
|
|
£m |
£m |
£m |
£m |
£m |
|
Capital financing requirement
|
0 |
0 |
0 |
21.5 |
24.6 |
|
Gross borrowing
|
0 |
0 |
0 |
21.5 |
3.1 |
|
In this instance the capital financing requirement is shown as zero for 2023/24 but increases as borrowing begins to be undertaken in future years. The head of finance reports that the authority had no difficulty meeting this requirement in 2022/23.
The proposed 2024/25 to 2028/29 capital programme includes £30 million debt financing for capital projects. The forecast capital financing requirement for 2026/27 is £24.6 million.
2.2 Capital expenditure
The first indicator shows the total capital expenditure plans of the council’s approved plus provisional programme including capital growth proposals put forward.
|
2023/24 |
2024/25 |
2025/26 |
2026/27 |
2027/28 |
2028/29 |
Indicator P-2 |
estimate |
estimate |
estimate |
estimate |
estimate |
estimate |
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
Estimates of capital expenditure |
26,483 |
32,710 |
35,545 |
10,062 |
6,134 |
2,648 |
The second indicator records actual capital expenditure for the previous financial year.
|
2022/23 |
2022/23 |
Indicator P-3 |
estimate |
actual |
|
£000 |
£000 |
Actual capital expenditure |
33,399 |
9,503 |
2.3 Borrowing need
This indicator reflects the authority’s underlying need to borrow for a capital purpose, its Capital Financing Requirement (CFR). This borrowing may not need to take place externally, and the council may judge it prudent to make use of cash that it has already invested for long term purposes.
|
31/3/2024 |
31/3/2025 |
31/3/2026 |
31/3/2027 |
31/3/2028 |
31/03/2029 |
Indicator P-4 |
estimate |
estimate |
estimate |
estimate |
estimate |
estimate |
|
£m |
£m |
£m |
£m |
£m |
£m |
Estimate of CFR |
|
|
|
|
|
|
Non-HRA |
0 |
0 |
21.5 |
24.6 |
29.0 |
30.0 |
Estimate of movement in year |
|
|
|
|
|
|
Non-HRA |
0 |
0 |
21.5 |
3.1 |
4.4 |
1.0 |
The capital financing requirement as at 31 March each year is derived from specific balances within the balance sheet, and adjustments are made for capital expenditure, and the resources applied to finance the expenditure. The authority’s capital expenditure is resourced immediately from capital receipts, reserves, grants, contributions and directly from revenue, the CFR is forecast to remain zero until 2025/26. The actual CFR for 31 March 2023 is shown below.
|
31/3/2023 |
Indicator P-5 |
actual |
|
£000 |
Actual capital financing requirement |
|
Non-HRA |
0 |
Actual movement in year |
|
Non-HRA |
0 |