FINANCE chiefs who oversaw a £1.4 million boost in interest payments to a local authority have been praised for “making the council’s money work”.
A report outlining how finances, cash, loans and investments were managed during the 2025/26 financial year was presented to councillors.
The treasury management report detailed how Torfaen Borough Council loaned £15m to councils in England and Scotland, earning it interest payments, while it also borrowed from other councils to help manage its own cash flow.
Loans to councils include £5m sent to Blackpool council while the bulk of the £1.434m earned in interest by the council was the £764,000 it made from investments in money market funds.
The council’s Labour leader praised the finance team when head of finance Robert Green presented the report to the July full council meeting.
Councillor Anthony Hunt said the finance department were “making the council’s money work as hard as it can”.
The Panteg councillor said loans are made from funds the council isn’t able to spend at the time and said: “It is making our money work for us rather than just sitting in a bank account and losing value in real terms.”
During the year new assets, or those which increased in value as a result of investment, included Cwmbran’s new Maendy Primary School, the acquisition of the site for the new waste transfer station in Blaenavon, completion of the development of Greenmeadow Community Farm in Cwmbran and investment across its property estate and highway network.
The council borrows from other authorities to make up a shortfall, of around £8m against its calculated borrowing requirement, as it has been running down its own cash balances rather than taking out commercial loans at unfavourable interest rates.
Internal borrowing, from its own funds, is the cheapest form of borrowing while the loans to other councils also help the authority maintain its minimum investment level for professional trading status, giving it access to better borrowing products.
The council’s total external debt reduced at the end of the financial year to £123.437million, from £131.626m in March 2025. The debt is divided between loans from the UK Government PWLB, which have the lowest interest rate and account for the largest balance on its books, market loans over 30 years and temporary in year borrowing from other local authorities.
The council paid £4.8m in interest on its loans during the past financial year.