Issue - meetings

To consider the report of the Chief Finance Officer.

Corporate Services Scrutiny Committee considered the report at its meeting on 24 January 2019 and its comments will be reported.

The Chief Finance Officer presented the report setting out the proposed 2019/20 prudential indicators for capital finance for adoption by the Council and set the annual statement of Minimum Revenue Provision (MRP). He referred to the minimum revenue provision which is the amount set aside from revenue to meet the repayment of debt principal and advised of the minimum revenue provision options that the Council used, the Asset Life Equal Instalment and Asset Life Annuity Method. A change in Government Guidance now allowed for an overpayment in respect of the funds that Councils could set aside over and above the statutory minimum revenue provision which could be reclaimed in future years. The Council currently had £5.602 million in voluntary overpayments.

The Chief Finance Officer highlighted the Capital financing required, the operational boundary and the authorised limit, this was the maximum the Section 151 officer was allowed to borrow to cover the Operational Boundary and day to day cashflow.

Corporate Services Scrutiny Committee considered the report at its meeting on 24 January 2019 and its comments were reported.

RECOMMENDED that Council adopt the:-

(1)        Prudential Indicators set out in Appendix A-C; and

(2)        Annual Statement of Minimum Revenue Provision for the Council.

To consider the report of the Chief Finance Officer.

The Chief Finance Officer presented the report on the  Prudential Code for Capital Finance in Local Authorities (incorporating the Annual Statement of Minimum Revenue Provision) which advised Members of the proposed 2019/20 Prudential Indicators for capital finance for adoption by the Council and set the annual statement of Minimum Revenue Provision (MRP). The objectives of the code were to ensure within the framework that the capital investment plans of local authorities were affordable, prudent and sustainable.  The changes to the Prudential Indicators and MRP report would be incorporated within the Budget Book for approval at Full Council on 26 February 2019.

He highlighted the Capital financing required, the operational boundary and the authorised limit.  He also referred to the minimum revenue provision, which is the amount set aside from revenue to meet the repayment of debt principal. He set out the detail of the five options which the Secretary of State considered to be prudent:-

·         Regulatory Method

·         Capital Financing Requirement Method

·         Asset Life (Equal Instalment) Method

·         Asset Life (Annuity) Method, and

·         Depreciation Method 

In response to a Member’s question, the Chief Finance Officer explained that the costs associated with the capital programme were built into the medium term financial plan, which overall required savings of £2.4m to be balanced over the medium term.  Subject to delivery of these savings, the Chief Finance Officer believed the rising costs were affordable.  However, he noted that Members would face difficult decisions in terms of balancing the Medium Term Financial Plan over the next year.

Corporate Services Scrutiny Committee noted the report and requested

Executive and Council to approve the adoption of:-

(1) The Prudential Indicators set out in Appendix A-C; and

(2) the Annual Statement of Minimum Revenue Provision for the Council.