It's flowering. There have been several similar enquiries recently, so the weather over the last year has probably contributed to bring them into flower. Enjoy them and cut the flowering stems right back once they have finished flowering.
A trowel in the hand is worth a thousand lost under a bush.
I agree with Bob - as far down as you can get. You can do the same with any leaves that have got tatty (I appreciate it's not easy to get in there, and you need really sharp secateurs)
Doncaster, South Yorkshire. Soil type: sandy, well-drained
I kept the seed heads from our phormium, dried them and sowed the seeds the following Spring. Quite a few germinated and l got half a dozen offspring. Might be worth a try if you're interested.
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