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Issue - decisions

Minimum Revenue Provision - 2017/18 Policy

 

 

14/02/2017 - Minimum Revenue Provision - 2017/18 Policy

(a)       That Members approve for the Council Fund:

 

·         Option 3 (Asset Life Method) be used for the calculation of the MRP in financial year 2017/18 for the balance of outstanding capital expenditure funded from supported borrowing fixed as at 31 March 2016.  The calculation will be the ‘straight line’ method over 50 years.

 

·         Option 3 (Asset Life Method) be used for the calculation of the MRP in 2017/18 for all capital expenditure funded from supported borrowing from 1st April 2016 onwards.  The calculation will be the ‘straight line’ or ‘annuity’ (where appropriate) method over an appropriate number of years, dependent on the period of time that the capital expenditure is likely to generate benefits.

 

·         Option 3 (Asset Life Method) be used for the calculation of the MRP in 2017/18 for all capital expenditure funded from unsupported (prudential) borrowing or credit arrangements.

 

(b)       That Members approve for the Housing Revenue Account (HRA):-

 

·         Option 2 (Capital Financing Requirement Method) be used for the calculation of the HRA’s MRP in 2017/18 for all capital expenditure funded by debt.

 

(c)        That Members approve that MRP on loans from the Council to NEW Homes to build affordable homes through the Strategic Housing and Regeneration Programme (SHARP)  (which qualify as capital expenditure in accounting terms) be as follows:-

 

·         No MRP is made during the construction period (of short duration) as the asset has not been brought into use and no benefit is being derived from its use.

 

·         Once the assets are brought into use, capital repayments will be made by NEW Homes.  The Council’s MRP will be equal to the repayments made by NEW Homes.  The repayments made by NEW Homes will be classed, in accounting terms, as capital receipts, which can only be used to fund capital expenditure or repay debt which is a form of MRP.  The capital repayment/capital receipt will be set aside to repay debt, and is the Council’s MRP policy for repaying the loan.