Issue - meetings

As detailed in the recommendations.

The Corporate Finance Manager introduced the Minimum Revenue Provision (MRP) – 2017/18 Policy report.  

                        As part of the budget strategy for 2017/18 officers critically reviewed the Council’s 2016/17 MRP Policy and recommended that changes were made to parts of the policy.  Detailed reports were considered at Cabinet, Corporate Resources Overview and Scrutiny Committee and County Council.  Changes to the 2016/17 and the 2017/18 Policy were approved at County Council in December. 

The report restated the revised 2017/18 policy as part of the suite of 2017/18 budget setting reports being considered by Cabinet and County Council.

RESOLVED:

(a)       That the following be approved and recommended to County Council for Council Fund (CF) outstanding debt that:-

·         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^st March 2016.  The calculation would 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 1^st April 2016 onwards.  The calculation would 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 was likely to generate benefits; and 

·         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 the following be approved and recommended to County Council for Housing Revenue Account (HRA) outstanding debt:-

·         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 the following be approved and recommended to County Council that MRP on loans from the Council to NEW Homes to build affordable homes through the Strategic Housing and Regeneration Programme (SHARP) (which qualified as capital expenditure in accounting terms) be as follows:-

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

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