Issue - meetings

The Prudential Code for Capital Finance in Local Authorities (Incorporating the Annual Statement of Minimum Revenue Provision)

Meeting: 07/02/2023 - Executive (Item 19)

19 The Prudential Code for Capital Finance in Local Authorities (Incorporating the Annual Statement of Minimum Revenue Provision) pdf icon PDF 361 KB

To consider the report of the Director Finance.

 

Additional documents:

Decision:

Agreed:

 

RECOMMENDED that Council approve the adoption of:-

 

(1)   the Prudential Indicators set out in Appendices A-C of the report presented at the meeting; and

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

 

Reason for Decision: As set out in the report.

 

 

 

Minutes:

The Executive received the report on the proposed 2023/24 Prudential Indicators for capital finance for adoption by the Council and set the annual statement of Minimum Revenue Provision (MRP), which would be incorporated within the Budget Book for approval at the full Council meeting as per the statutory requirement.

 

Particular reference was made to the following:-

 

·        The Minimum Revenue Provision statement provided an analysis of how the Council sets aside a statutory amount for the repayment of debt. The Council opted to use the Asset Life Annuity method, which allowed the Council to repay the cost of borrowing in a similar manner to a repayment mortgage. The Council only had to set aside an amount which relates to borrowing for capital assets.

 

·        The MRP payments allowed for voluntary repayments of debt and as of 2023, the Council still had over payments of £3.86 Million. The proposal in the report would result in a MRP charge for 2023/24 of £1.783 Million.

 

·        The Prudential Code provided a range of indicators to allow Members to analyse Capital expenditure and the amount of debt. The code was split between the MRP indicators for the Capital Programme and Treasury management.

 

·        The Capital Financing requirement set out how much the Council needed to borrow to finance the Capital Programme, the operational boundary indicator was the amount of borrowing the Director Finance was allowed to make and the authorised limit was the total amount of debt allowed to be borrowed.

 

Councillor D. Moore, as an opposition group leader, spoke on this item. She enquired at what point would financing costs be considered unsustainable for the General Fund.

 

The Leader advised that he would provide responses to the question raised.

 

RECOMMENDED that Council approve the adoption of:-

 

(1)   the Prudential Indicators set out in Appendices A-C of the report presented at the meeting; and

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