The Local Authorities (Capital Finance and Accounting) (Amendment) (England) (No. 2) Regulations 2004

Calculation of minimum revenue provision

6.  In regulation 28 of the Principal Regulations (calculation of minimum revenue provision)—

(a) for paragraph (1), there shall be substituted—

“(1) Subject to paragraphs (2) and (3) and regulation 29, the minimum revenue provision for the current financial year shall be calculated by the local authority in accordance with the following formula—

where—

• CFR is the capital financing requirement at the end of the preceding financial year;

• A is an adjustment (which may be a positive, nil or negative amount) to be calculated in accordance with paragraph (1A); and

• HC is—

  (a)

  in the case of a housing authority, the opening HRA capital financing requirement for the current financial year, except that if that opening HRA capital financing requirement is a negative amount, HC is nil; and

  (b)

  in the case of any other local authority, nil.

(1A) For the purposes of paragraph (1), A is to be calculated—

(a) in the case of a 2003 housing authority, in accordance with the following formula—

• 

• and

(b) in the case of any other local authority, in accordance with the following formula—

CFRM - RA

where—

• CFRM is the capital financing requirement on 31st March 2004;

• HA is the housing amount for 2004;

• HB is the opening HRA capital financing requirement for the financial year beginning on 1st April 2004, except that if that opening HRA capital financing requirement is a negative amount, HB is nil;

• NHA is the non-housing amount for 2004; and

• RA is the relevant amount for 2004.”; and

(b) for paragraphs (3) and (4), there shall be substituted—

“(3) Where, in relation to the current financial year—

(a) the total of—

(i) the amount calculated in accordance with the formula for the minimum revenue provision in paragraph (1); and

(ii) the additional amount, if any, calculated under paragraph (2),

is a negative amount; or

(b) CFR is nil or a negative amount,

the minimum revenue provision, including the additional amount, if any, for the current financial year shall be treated as nil.

(4) For the purposes of this regulation—

“arms length management organisation” means a body set up by a local authority as a housing management company to exercise management functions as agent of the local authority under an arrangement approved by the Secretary of State under section 27 of the Housing Act 1985 (management agreements)(1);

“capital financing requirement” has the same meaning as in the “Prudential Code for Capital Finance in Local Authorities” published by CIPFA, as amended or reissued from time to time(2);

“certified value” means the market value certified by the district valuer or by a suitably qualified valuer employed by the local authority;

“current financial year” means any financial year for which the local authority is determining the amount of its minimum revenue provision;

“district valuer”, in relation to any land in the district of a local authority, means an officer of the Commissioners of Inland Revenue appointed by them for the purpose of exercising, in relation to that district, the functions of the district valuer under the Housing Act 1985;

“housing amount for 2004” and “non-housing amount for 2004” have the same meaning, respectively, as the terms “housing amount” and “non-housing amount” had on 31st March 2004 in Part XII of the Local Authorities (Capital Finance) Regulations 1997 (minimum revenue provision)(3), except that “the current year” within the meaning of that Part shall be treated as the financial year beginning on 1st April 2004;

“housing authority” means a local authority which is required to keep a Housing Revenue Account for the current financial year by virtue of section 74 of the Local Government and Housing Act 1989 (duty to keep Housing Revenue Account)(4) and “2003 housing authority” means a local authority which was required by that section to keep a Housing Revenue Account for the financial year beginning on 1st April 2003;

“Housing Revenue Account”, also referred to as “HRA”, has the same meaning as in section 74 of the Local Government and Housing Act 1989 (duty to keep Housing Revenue Account);

“major repairs reserve” has the same meaning as in regulation 7(5) of the Accounts and Audit Regulations 2003 (statement of accounts)(5);

“opening HRA capital financing requirement” means—

(a)

for the financial year beginning on 1st April 2004, the amount calculated in accordance with paragraph (5);

(b)

for the financial year beginning on 1st April 2005 and any subsequent financial year, the amount calculated in accordance with paragraph (6);

“preceding financial year” means the financial year immediately preceding the current financial year; and

“relevant amount for 2004” has the same meaning as the term “relevant amount” had on 31st March 2004 in regulation 152 of the Local Authorities (Capital Finance) Regulations 1997 (relevant amount for subsequent financial years), except that “the current year” within the meaning of that regulation 152 shall be treated as the financial year beginning on 1st April 2004.”.

(1)

1985 c. 68. Section 27 was substituted by S.I. 2003/940.

(2)

The current issue of this code of practice was published in London in 2003. ISBN 0 85299 989 5. See, in particular, paragraph 85 of the current issue.

(3)

S.I. 1997/319; these Regulations were revoked on 1st April 2004 by virtue of the repeal of Part IV of the Local Government and Housing Act 1989 (c. 42) under which they were made. See S.I. 2003/2938 (C.107).

(4)

1989 c. 42; section 74 was amended by section 222 of, and paragraph 24(2) of Part IV of Schedule 18 to, the Housing Act 1996 (c. 52).

(5)

S.I. 2003/533; paragraph (5) of regulation 7 was substituted by S.I. 2004/556.