Local elections on Thursday 7th May 2026 will see voters choose around 4,850 councillors across 134 English councils and six directly-elected mayors, alongside parliamentary contests in Scotland and Wales. Elections that had been expected to be postponed in some areas because of local government reorganisation are now due to go ahead, following the Government’s February decision to withdraw the postponements after a legal challenge.
For councils, the elections come at a difficult point. Financial resilience remains stretched, capital programmes are under pressure from higher borrowing costs, and reorganisation is creating uncertainty over structures, priorities and accountability. A change in political control, new cabinet members or a shift to no overall control may not immediately alter the Treasury Management Strategy, but it can change the questions being asked of it.
New councillors will need to get to grips quickly with the distinction between policy ambition and financial capacity. Treasury management is often viewed as technical, but it sits close to some of the most important political choices a council makes: how much to borrow, when to borrow, how to fund regeneration, how much risk to take in investments, and how to balance short-term affordability with long-term sustainability.
For treasury teams, the post-election period is therefore a governance moment. Member training, clear reporting and early engagement with new portfolio holders will be essential. At its core, treasury management is about balancing risk, liquidity and affordability, rather than focusing solely on cost or return.
A change in administration could bring renewed scrutiny of existing capital schemes, commercial property exposure, minimum revenue provision assumptions, investment counterparties and the use of internal borrowing. New members may also challenge historic decisions, particularly where borrowing was agreed in a lower-rate environment but is now being refinanced or carried at materially higher cost.
The political backdrop is also unusually fragmented. Recent polling suggests Labour and Conservative councils may face pressure from Reform UK, the Greens and Liberal Democrats in different parts of the country, increasing the likelihood of coalition or minority control in some authorities. That matters for treasury because decision-making may become slower, more committee-led and more dependent on cross-party understanding.
The practical priority is preparation. Treasury teams should ensure that strategy documents are accessible, risks are clearly explained and prudential indicators are not just treated as a compliance appendix. New councillors need to understand what is fixed, what is discretionary and what would require formal approval to change.
The elections will not change the fundamentals of treasury management. Security, liquidity and yield remain the hierarchy for investments, while borrowing must remain prudent, affordable and sustainable. But elections can change risk appetite, political priorities and the level of challenge from members. For treasury teams, the opportunity is to use the transition to strengthen understanding and reinforce the importance of good governance before difficult decisions arise.
Please contact us at info@arlingclose.com to find out how we can assist through targeted member training and briefings, designed to build confidence and understanding in treasury management responsibilities.
05/05/2026
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