Issue - decisions

Minimum Revenue Provision - 2018/19 Policy

01/03/2018 - Minimum Revenue Provision - 2018/19 Policy

(a)       That Members approved for the Council Fund (CF) unfinanced capital expenditure, changing the MRP policy for  supported and unsupported borrowing from ‘straight line’ to the ‘annuity’ method from 2017/18.  This would mean that:-


  • The historic balance of outstanding capital expenditure funded from supported borrowing as at 31 March 2017, will be provided for on an annuity basis over the remaining 49 year period (as it was changed to straight line over 50 years in 2016/17)


  • 2016/17 capital expenditure funded from supported and unsupported borrowing (and future years) will be provided for based on the asset’s life on an annuity basis


(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 2018/19 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.