This council uses the creditworthiness service provided by Link Asset Services. This service uses a sophisticated modelling approach with credit ratings from all three rating agencies - Fitch, Moody's and Standard and Poor's, forming the core element. However, it does not rely solely on the current credit ratings of counterparties but also uses the following as overlays:

• credit watches and credit outlooks from credit rating agencies
• Credit Default Swap spreads to give early warning of likely changes in credit ratings
• sovereign ratings to select counterparties from only the most creditworthy countries

The full Investment Strategy for 2025/26 was approved by Full Council on 04 March 2025 and is available on the council's website.

The council's maximum exposure to credit risk in relation to its investments in financial institutions of £279.013m cannot be assessed generally as the risk of any institution failing to make interest payments or repay the principal sum will be specific to each individual institution. Recent experience has shown that it is rare for such entities to be unable to meet their commitments. A risk of irrecoverability applies to all of the council's deposits, but there was no evidence at the 31 March 2026 that this was likely to crystallise.

AMOUNTS ARISING FROM EXPECTED CREDIT LOSSES (34B)

The council has reviewed all financial assets and determined that the credit risk exposure on investments has been reviewed and calculated on a 12-month basis, which has been deemed immaterial for the financial assets held as at 31 March 2026.

CREDIT RISK EXPOSURE (34C)

The table below shows the council's exposure to credit risk as at 31 March 2026. This is not the recognised credit losses but outlines the exposure only:

The above does not include short term investments with local authorities or government as the Code does not allow a loss allowance to be recognised since statutory provisions prevent default.

Credit Risk – Receivables

Trade receivables arise from the provision of goods and services and the carrying out of the council's functions. The impairment loss allowances shown in Note 13 reflect the credit quality of the debtors. These have been calculated for each service or debt type (such as adult social care, parking or sundry debt), by reference to the council's historic experience of default with an adjustment for current and forecast economic conditions specific to each area. The impairment loss allowances for receivables are reviewed annually.

Debts owed from central government and other public bodies are excluded from impairment losses and credit risk.

COLLATERAL AND OTHER CREDIT ENHANCEMENTS (34D)

During the reporting period the council held no collateral as security.