Balance sheet projections
About this course
Modelling external debt vs CFR, internal borrowing capacity, reserves run-down, and the borrowing-need profile over 30+ years.
What you'll learn
- What it is
- Model architecture
- CFR & debt walk
- Reserves projection
- Scenario analysis
- Governance
Part of these pathways
Related courses
- The Capital Financing Requirement (CFR)
- ESG & sustainable treasury
- Alternatives to PWLB
- After the S114: capitalisation & EFS
- Devolution & reorganisation: the treasury view
- Liability Benchmark: the essentials
Common questions
What is Balance sheet projection?
Multi-year forward projection of the council's key balance sheet positions — CFR, external debt, internal borrowing, reserves, working capital — typically 25-30 years out. The integrated modelling discipline that underpins strategic borrowing decisions, the liability benchmark, the FC ratio trajectory, and reserves planning.
What is Central case?
The model's base scenario — the council's best estimate of the most likely future trajectory. Around which all scenario analysis is anchored. Updated annually as part of TMSS preparation.
What is Input discipline?
The practice of explicitly stating every assumption that drives the model. Capital programme by year, MRP policy, rate assumptions, capital receipts, reserves trajectory, etc. Hidden assumptions = brittle model. Explicit assumptions = scenarios become straightforward.
What is Internal borrowing capacity?
Cash that can sustainably fund capital expenditure instead of external borrowing without compromising operations. Combination of working balances above minimum + earmarked reserves with timing flexibility + general reserves above threshold. Typically 10-25% of CFR for most councils.
What is Model architecture?
How a balance sheet projection model is structured. Typically: input layer (capital programme, MRP policy, rate assumptions, reserves trajectory) → calculation layer (CFR walk, debt profile, financing costs) → output layer (PIs, FC ratio, liability benchmark, reserves position). Good architecture separates inputs from calculations.
What is Model as conversation prop?
The model isn't a black box producing one answer — it's a tool for structured conversation about the council's financial future. Different scenarios surface different conversations. The model's value is in the discussions it enables, not just the numbers it produces.