Decision details

Minimum Revenue Provision - 2022/23 Policy

Decision Maker: Flintshire County Council

Decision status: Recommendations Approved

Is Allweddol decision?: No

Is subject to call in?: No

Purpose:

Local Authorities are required each year to set aside some of their revenue resources as provision for the repayment of debt. The report presents the Council’s draft policy on Minimum Revenue Provision

Decision:

(a)       That the following be approved for Council Fund (CF): -

 

  • Option 3 (Asset Life Method) be used for the calculation of the MRP in financial year 2022/23 for the balance of outstanding capital expenditure funded from supported borrowing fixed as at 31st March 2017. The calculation will be the ‘annuity’ method over 49 years. 

 

  • Option 3 (Asset Life Method) be used for the calculation of the MRP in 2022/23 for all capital expenditure funded from supported borrowing from 1st April 2016 onwards. The calculation will be the ‘annuity’ 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 2022/23 for all capital expenditure funded from unsupported (prudential) borrowing or credit arrangements. The calculation will be the ‘annuity’ method over an appropriate number of years, dependent on the period of time that the capital expenditure is likely to generate benefits.  

 

(b)       That the following be approved for Housing Revenue Account (HRA): -

 

  • Option 3 (Asset Life Method) be used for the calculation of the HRA’s MRP in 2022/23 for the balance of outstanding capital expenditure funded from debt fixed as at 31st March 2021. The calculation will be the ‘annuity’ method over 49 years.

 

  • Option 3 (Asset Life Method) be used for the calculation of the HRA’s MRP in 2022/23 for all capital expenditure funded from debt from 1st April 2021 onwards. The calculation will be the ‘annuity’ method over an appropriate number of years, dependent on the period of time that the capital expenditure is likely to generate benefits. 

 

(c)        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 (loan) 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.  The capital repayment / capital receipt will be set aside to repay debt and is the Council’s MRP policy for repaying the loan. 

Report author: John Richards

Publication date: 09/08/2022

Date of decision: 15/02/2022

Decided at meeting: 15/02/2022 - Flintshire County Council

Accompanying Documents: