Decision Reference Number: WPCC4-0052
Lead Officer: Sara Ansell
Chief Officer approval: Not applicable
Date: 26/03/2025
Publication: Information in this form is subject to the Freedom of Information Act 2000 (FOI Act) and other legislation. Unless the information provided is covered by an exemption and stated to be either confidential or partly confidential, the information contained in the form will be published on the OPCC website.
Status: Non-confidential
If partially-confidential or confidential please detail the FOI exemption applied and specify which parts are confidential:
Decision summary:
The Police and Crime Commissioner is required to produce separate Reserves, Capital, and Treasury Management strategies. They are separate documents but are presented as part of a single decision notice as they represent a package of financial strategies for 2025/26 and have several interdependencies between them. They should be read in conjunction with the annual budget report which is published on the OPCC website. The strategies have been reviewed as part of the annual governance process and have also been considered by the independent Joint Audit and Standards Committee at their meeting on the 19 March 2025. They are now presented for formal approval by the PCC.
I confirm that my register of interests declaration is up to date and that none of my interests preclude me from making this decision.
Signature: P.Seccombe
Date: 28/03/2025
Supporting information
1. Background information: why do we need to make this decision?
The summarised details relating to each of the strategies are outlined below:
Reserves strategy 2025-26
Each year the Police and Crime Commissioner (PCC) reviews his reserve strategy in line with the budget.
The governments expectations is provided in guidance to Police and Crime Commissioners (PCCs) regarding the information that should be included in their reserve strategy.
The guidance stipulates that “each PCC should publish their reserves strategy on their website, either as part of their medium term financial plan or in a separate reserves strategy document. The reserves strategy should include details of current and future planned reserve levels, setting out a total amount of reserves and the amount of each specific reserve held for each year. The reserves strategy should cover revenue and capital reserves and provide information for the period of the medium term financial plan. Sufficient information should be provided to enable understanding of the purpose(s) for which each reserve is held and how holding each reserve supports the PCC’s medium term financial plan.
The strategy meets the requirements of the guidance and includes information from the recently approved budget report and medium-term financial plan, but it also includes more comprehensive details on the types of reserves and CIPFA guidance.
The reserves strategy refers to the level of reserves falling beyond £10m over the course of the current MTFP, and outlines, the reasons why this is tolerated in 2025/26, but that it will be the subject of close monitoring during 2025/26, and that possible replenishment of the reserve may be required in future years, dependent on risk appetite and a review of any new and emerging risk or significant changes in current risk.
Capital Strategy 2025-26:
The purpose of the capital strategy is to demonstrate that capital expenditure and investment decisions are taken in line with desired outcomes and take account of stewardship, value for money, prudence, sustainability, and affordability.
The Capital Strategy is a key document for the Police and Crime Commissioner (PCC) and Warwickshire Police and forms part of the revenue and capital planning process. It provides a high-level overview of how capital expenditure; capital financing and treasury management activity contribute to the delivery of desired outcomes. It also provides an overview of how associated risk is managed and the implications for future financial sustainability. It includes an overview of the governance processes for approval and monitoring of capital expenditure.
The capital strategy links in with the treasury management strategy in terms of funding strategies particularly borrowing for the capital programme. It is therefore suggested that the two documents are read in tandem.
The capital strategy sets out the medium to longer term position of a sustainable approach to capital financing, and to achieve this the PCC is adopting a strategy whereby currently approximately half of capital funding comes from revenue contributions, and that the intention is to increase this by circa £0.500m per year in line with the MTFP, and the remainder of required funding is financed primarily from borrowing. The way in which different funding streams are used, is also referenced in the strategy, notably that borrowing will be predominantly linked with longer term assets, and other sources of funding with shorter term assets. This approach is and will continue to help minimise the revenue costs of capital funding and is detailed further within the strategy.
There have only been limited amendments to the capital strategy for 2025/26, in recognition that the direct of travel remains consistent with that of previous years.
Treasury management strategy 2025-26:
The Treasury Management Strategy has been reviewed for 2025-26, with the support of our independent Treasury advisors. Warwickshire must operate a balanced budget, which broadly means that cash raised during the year will meet cash expenditure. Part of the treasury management operation is to ensure that this cash flow is adequately planned, with cash being available when needed. Surplus monies are invested in low-risk counterparties or instruments commensurate with the Police and Crime Commissioner’s low risk appetite, providing adequate liquidity initially before considering investment return.
The second main function of the treasury management service is the funding of the Commissioner’s capital plans. These capital plans provide a guide to borrowing need, and longer-term cash flow planning to ensure that the PCC can meet the capital spending obligations. The management of longer-term cash may involve arranging long or short-term loans and the framework for this is covered in the strategy.
The responsible officer for treasury management is the Chief Finance Officer to the Police & Crime Commissioner (CFO) and the day-to-day responsibilities for treasury management are delegated to the force in accordance with the corporate governance framework.
CIPFA defines treasury management as:
“The management of the local authority’s investments and cash flows, its banking, money market and capital market transactions; the effective control of the risks associated with those activities; and the pursuit of optimum performance consistent with those risks.”
The Commissioner receives as a minimum, three main reports each year, which incorporate a variety of polices, estimates and actuals. These reports are also shared with the Joint Audit and Standards Committee for scrutiny and consideration.
Treasury management strategy (attached), which includes the prudential limits and prudential indicators.
The report covers:
- The prudential indicators and borrowing strategy in accordance with the capital programme as included within the budget report, and the capital strategy. The prudential indicators also include the liability benchmark indicator, which was recently introduced and is explained in more detail in the document.
- The minimum revenue provision (MRP) policy (how residual capital expenditure is charged to revenue over time)
- The treasury limits and overall strategy (how the investments and borrowings are to be organised)
- The investment strategy (the parameters for managing investments)
- Information regarding the economic and local context and debt rescheduling.
A mid-year treasury management report will be produced to update the PCC with the position regarding capital spending and financing, including investment and borrowing implications, and the amendment of any prudential indicators as necessary. It also monitors whether the treasury activity is meeting the strategy and whether any policies require revision.
A year end treasury report will also be produced to provide details on a selection of actual prudential and treasury indicators and the actual treasury operations compared to the estimates within the strategy.
The PCC will have the opportunity to scrutinise the report and will then approve it, after it has also been considered by the Joint audit and Standards Committee, and any feedback form them.
Whilst the OPCC receives expert independent treasury management advice, responsibility for treasury management decisions always remains with the PCC and Chief finance Officer. They recognise that there is value in employing external providers of treasury management services to acquire access to specialist skills and resources.
The CIPFA Code requires that the responsible officer ensures that relevant personnel receive adequate training in treasury management. Finance staff meet with the treasury advisors throughout the year to discuss topical issues and to remain updated, and any opportunities for further training will be kept under review.
2. What additional documents are relied upon? Please provide a link or separate attachments.
Treasury Management Strategy 2025-26
3. What benefits will this bring, including financial, social or environmental benefits?
The PCC will comply with all current guidance and legal requirements regarding these elements of its financial affairs, and they help to ensure good financial governance within the organisation and across the force and set the strategic direction for the future.
4. What is the impact of not approving the application?
There will be a failure to comply with relevant legislation and guidance
5. How much will it cost? (please provide cost breakdown, including any identified savings, and include where they have been approved)
There are no costs associated with the production of these documents, but they will provide the framework for the financial management of the PCC’s budget and financial affairs, to ensure that appropriate governance is in place and that the PCC and Warwickshire Police are resilient and are financially sustainable.
6. Who has been consulted on this proposal?
PCC, DPCC, OPCC managers, Joint Audit and Standards Committee, Chief Officers, and director of Finance and other key Finance staff.
7. Will this decision have an impact on any specific individuals or groups or communities?
None specifically.
8. Does this decision have legal implications? Has legal advice been sought?
The documents have been prepared based on legal requirements and guidance.
Comments from the Chief Finance Officer
The production of these financial strategies is an essential and important part of the overall financial strategy and governance arrangements. They underpin one of the primary responsibilities of the PCC, in conjunction with the Chief Finance Officer to maintain a sound financial position. The production of these documents which are reviewed and updated annually. Reflect the current challenges and circumstances and ensures that best practise and current guidance is adhered to.
Comments from the Chief Executive and Monitoring Officer
These strategies demonstrate the strong governance and financial management arrangements that are in place to safeguard the use of public funds. They have been reviewed by the Joint Audit and Standards Committee to enable the PCC to benefit from their subject matter expertise.
