The Capital Strategy for members
About this course
How strategic borrowing decisions cascade. The link to the Capital Programme. What you're approving when you approve a Capital Strategy.
What you'll learn
- What it is
- Reading the strategy
- Affordability test
- Substantive scrutiny
Part of these pathways
Related courses
- Council money in plain English
- Treasury management for councillors
- Your responsibilities as a councillor
- Meet your council
- Reading the Metrics dashboard
- Reading the quarterly & outturn reports
Common questions
What is Borrowing rationale?
The Capital Strategy's explanation of why the council is borrowing — for which schemes, with what affordability case, against what alternatives. Strong rationale evidences thoughtful capital decisions; weak rationale invites scrutiny.
What is Capital Programme?
The detailed list of specific schemes the council plans to undertake — schools, housing, highways, regeneration, etc. Each scheme has a cost, a phasing, and a financing plan. The operational expression of the Capital Strategy.
What is Capital Strategy?
A long-term, strategic document required by Prudential Code §5 since 2021. Sets out the council's capital ambitions, financing approach, affordability and governance over typically 25-50 years (asset life). Approved annually by full Council alongside the TMSS.
What is FC ratio?
Financing costs to net revenue stream — the headline affordability indicator. Shows what % of council tax + government grants + reserves usage goes to debt service. The Capital Strategy projects this out 25 years; TMSS reports each year against estimate.
What is Long-term context?
The 2021 Prudential Code's framing — Capital Strategy is about asset-life horizons (25-50 years for major capital), not just the 3-year window of the TMSS. Long-term affordability and strategic shape are the focus.
What is S3 LGA 2003?
Section 3 of the Local Government Act 2003 — the statutory affordable-borrowing duty. Every council must determine and keep under review the maximum amount it can afford to allocate to capital expenditure. The Capital Strategy is the document that satisfies this duty at the strategic level.