PART 6 E+W REVENUE PROVISION

Duty to make revenue provision E+W

27.—(1) During the financial year beginning on 1st April 2004 and every subsequent financial year, a local authority—

(a) shall charge to a revenue account a minimum amount (“minimum revenue provision”) for that financial year; and

(b) may charge to a revenue account any amount in addition to the minimum revenue provision,

in respect of the financing of capital expenditure incurred by the local authority in that year or in any financial year prior to that year.

(2) During the financial year beginning on 1st April 2004 and every subsequent financial year, a parish council or charter trustees may charge to a revenue account any amount in respect of the financing of capital expenditure incurred by the parish council or the charter trustees, as the case may be, in that year.

Commencement Information

I1 Reg. 27 in force at 1.1.2004 for specified purposes and 1.4.2004 in so far as not already in force, see reg. 1(1)

[F1 Calculation of minimum revenue provision E+W

28.— (1) Subject to paragraphs (3) and (9) and to regulation 29, where a local authority’s preceding CFR, taking into account any reductions made in accordance with paragraphs (4) and (8), is an amount greater than nil, the minimum revenue provision calculated by the authority for the current financial year shall be four per cent of that amount.

(2) Where a local authority’s preceding CFR, taking into account any reductions made in accordance with paragraphs (4) and (8), is nil or a negative amount, its minimum revenue provision for the current financial year shall be nil.

(3) Where the amount calculated by the local authority as its minimum revenue provision for the current financial year, taking into account any reductions made in accordance with paragraph (9) and regulation 29, is nil or a negative amount, the minimum revenue provision for the current financial year shall be nil.

(4) The local authority shall treat its preceding CFR as reduced, for the purposes of calculating the amount of its minimum revenue provision for the current financial year, by—

(a) where the amount of its housing CFR on 31st March 2004 is greater than nil, that amount; and

(b) where the amount of its housing CFR on 31st March of the preceding financial year is greater than the amount of its housing CFR on 31st March 2004, the amount of the difference.

(5) Where the local authority—

(a) incurred capital expenditure (“the relevant expenditure”) on an asset (“the relevant asset”), which was not capital expenditure on housing assets;

(b) incurred the relevant expenditure in a financial year beginning on or after 1st April 2006 but before the current financial year; and

(c) financed the relevant expenditure by borrowing or credit arrangements,

and either paragraph (6) or paragraph (7) applies, then paragraph (8) shall apply.

(6) This paragraph applies where the local authority charged to a revenue account, for the preceding financial year, an amount in respect of the financing of the relevant expenditure which—

(a) was in addition to the minimum revenue provision for the preceding financial year; and

(b) was equal to the amount which the authority was required by proper practices to charge to its income and expenditure account in the preceding financial year in respect of amortisation, depreciation and impairment of the relevant asset.

(7) This paragraph applies where the local authority—

(a) did not charge to a revenue account, for the preceding financial year, an amount in respect of the financing of the relevant expenditure in addition to the minimum revenue provision for the preceding financial year; and

(b) was not required by proper practices to charge an amount to its income and expenditure account in the preceding financial year in respect of amortisation, depreciation or impairment of the relevant asset.

(8) Where this paragraph applies, the local authority may treat its preceding CFR as reduced, for the purposes of calculating the amount of its minimum revenue provision for the current financial year, by the amount by which its capital financing requirement increased in the preceding financial year by virtue of the relevant expenditure on the relevant asset.

(9) Where four per cent of the local authority’s non-housing CFR on 31st March 2004 is greater than the amount specified in paragraph (10), the authority may reduce the minimum revenue provision for the current financial year by the amount of the difference.

(10) The amount specified for the purposes of paragraph (9) is the amount of the minimum revenue provision that the local authority would have been required to make for the financial year beginning on 1st April 2004 in accordance with Part IV of, and Schedule 3 to, the Local Government and Housing Act 1989 if that Part and that Schedule had not been repealed by the Local Government Act 2003.

(11) In this regulation—

“capital financing requirement” has the same meaning as in the “Prudential Code for Capital Finance in Local Authorities” published by CIPFA;

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

“housing assets” means any land, houses or other property to which subsection (1) of section 74 of the Local Government and Housing Act 1989 (duty to keep Housing Revenue Account) for the time being applies;

“housing CFR” means that part, if any, of the capital financing requirement which is in respect of borrowing or credit arrangements used to finance capital expenditure on housing assets;

“non-housing CFR” means that part of the capital financing requirement which is not housing CFR;

“preceding CFR” means capital financing requirement at the end of the preceding financial year; and

“preceding financial year” means the financial year immediately preceding the current financial year.]

Textual Amendments

F1 Reg. 28 substituted (30.3.2007) by The Local Authorities (Capital Finance and Accounting) (Amendment) (England) Regulations 2007 (S.I. 2007/573), regs. 1(1), 3(1) (with regs. 1(3), 3(3))

Commencement Information

I2 Reg. 28 in force at 1.1.2004 for specified purposes and 1.4.2004 in so far as not already in force, see reg. 1(1)

Commutation adjustment E+W

29.—(1) Subject to paragraph (2), where a commuted payment was made to or for the benefit of a local authority in the financial year beginning on 1st April 1992, the local authority may reduce the amount of its minimum revenue provision for the current financial year, calculated in accordance with regulation 28, by an amount calculated in accordance with the following formula—

where—

• G is the total amount of contributions, grants and subsidies which would have been payable to the local authority by the Secretary of State for the current financial year but for commutation;

• I is the total of—

  (a)

  the amount by which interest, payable by the local authority in the current financial year on loans, is reduced; and

  (b)

  the amount by which interest, payable to the local authority in the current financial year on deposits and investments, is increased,

  by virtue of commutation; and

• M is the amount of minimum revenue provision for the current financial year which would have been calculated by the local authority in accordance with regulation 28 but for commutation, less the amount of minimum revenue provision for the current financial year actually calculated in accordance with regulation 28.

(2) Where the amount calculated in accordance with the formula in paragraph (1) is a negative amount, that amount shall be treated as nil.

(3) For the purposes of paragraph (1)—

“commutation” means the making of a commuted payment to, or for the benefit of, a local authority in the financial year beginning on 1st April 1992;

“commuted payment” has the same meaning as that term had on 31st March 2004 in section 157 of the Local Government and Housing Act 1989 (commutation of, and interest on, periodic payments of grants etc.)(1); and

“current financial year” has the same meaning as in regulation 28(4).

Commencement Information

I3 Reg. 29 in force at 1.1.2004 for specified purposes and 1.4.2004 in so far as not already in force, see reg. 1(1)

(1)

Section 157 was amended by paragraph 43 of Schedule 4 to the Police and Magistrates' Courts Act 1994 (c. 29) and by section 103 of, and paragraph 1(2)(zd) of Schedule 7 to, the Police Act 1997 (c. 16); there are other amendments to section 157 that are not relevant to these Regulations.