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Decision details
Minimum Revenue Provision method change 2022-23
Decision status: Recommendations Approved
Is Key decision?: No
Is subject to call in?: No
Decision:
Cabinet is asked to recommend the following to full Council:
1) The MRP method for supported borrowing is revised to the annuity method using average PWLB rate for the year (01/04/2022 to 31/03/2023).
2) The MRP method for unsupported borrowing is revised to the annuity method using average PWLB rate for the year (01/04/2022 to 31/03/2023) weighted combined basis.
3) That the revised MRP Policy Statement shown at Appendix C is approved for 2022/23.
4) That the revised MRP Policy Statement shown at Appendix C becomes the default MRP Policy for the Council going forward pending annual review as part of the Treasury Management Strategy.
Reasons:
These revisions to the methods for calculating MRP will result in reduced charges to the General Fund revenue account helping to reduce costs and preserve vital local services at a time when budgets are under severe pressure. The in-year savings made can be taken now to reduce the MRP charge, and hence pressure on the budget, used to make Voluntary Revenue Provision (VRP) charges that can be used to offset MRP charges in future years to alleviate budget pressures then or a combination of the two approaches.
The changes will also align the Council’s policy to what is considered best practice by CIPFA and is determined as more prudent. It is also considered fairer to Taxpayers as it results in the debt liability being repaid earlier and doesn’t leave future generations to foot the bill for assets that were purchases many years ago where the economic benefits have been fully consumed
Publication date: 31/01/2023
Date of decision: 30/01/2023
Decided at meeting: 30/01/2023 - Cabinet
Accompanying Documents:
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