Decision details

The Local Authorities (Capital Finance and Accounting) Regulations 2003 require local authorities to charge to their revenue account in each financial year a minimum amount to finance capital expenditure. This is commonly referred to as Minimum Revenue Provision.

In the context of significant medium term financial pressures the council continues to review the efficiency and effectiveness of all aspects of spend. As part of this review, and with advice from the Local Government Association, the council has reassessed the expenditure that is required under statute relating to a prudent Minimum Revenue Provision.

This report proposes changes to the county council's Minimum Revenue Provision policy statements for the years 2017/18 and 2018/19 including a change to the method used to calculate Minimum Revenue Provision.

Based on the proposed policy, the county council has created an historic over provision of Minimum Revenue Provision of c£134m and as a consequence of this will reduce its future annual provision until the over provision has been recovered or it is deemed appropriate to set additional monies aside. It is estimated that this could result in a reduced charge for 14 years from 2017/18.

The immediate financial effect of these changes is a saving of £13.2m in 2017/18 and £9.4m in 2018/19. The council will continue to review its provisioning policy annually in the years thereafter to identify whether there is a need to make a provision, or whether there are further opportunities to save whilst ensuring statutory obligations are met.

The Cabinet approved the recommendation as set out in the report.