Changes to the capital framework: Minimum Revenue Provision
Applies to England
Download the full outcome
Detail of outcome
The government is committed to ensuring that the local government capital system is sufficiently robust at constraining risk while still supporting local investment.
As part of its broader strategy to strengthen the capital system, the Department for Levelling Up, Housing and Communities has conducted a series of consultations on amendments to the Local Authorities (Capital Finance and Accounting) (England) Regulations 2003 and the statutory guidance that sets out local authorities’ statutory duty to set aside money each year for the repayment of debt, known as Minimum Revenue Provision (“MRP”).
This document sets out the government’s response to the third and final consultation, and details the amendments made to the regulations and guidance.
Original consultation
Consultation description
Local authorities can freely borrow and invest under legislation and guidance known as the Prudential Framework.
Notwithstanding these freedoms, authorities must make sure borrowing is affordable. Where capital expenditure is financed by borrowing, authorities have a statutory duty to set aside revenue funds to repay the principle of the debt; this is known as Minimum Revenue Provision (MRP).
The government has identified that some authorities are not sufficiently complying with this duty and is proposing changes to regulations to make sure that practices are prudent and consistent across the sector.
Documents
Last updated 10 April 2024 + show all updates
-
Added government response to the consultation.
-
First published.