Consultation on changes to statutory guidance and regulations: Minimum Revenue Provision

Since 2004, local authorities in England borrow and invest under the Prudential Framework (“the Framework”). It provides wide freedoms for authorities to borrow and invest without seeking the government’s consent, allowing authorities to determine their own capital strategies and deliver the investment that is needed locally, provided that the plans are prudent and affordable. These powers are set out in the Local Government Act 2003 (“the 2003 Act”), the Local Authority (Capital Finance and Accounting) Regulations 2003 (“the Regulations”) and supported through four statutory codes and guidance issued by CIPFA and the government. The objectives of the Framework are to drive sound investment and borrowing decisions in a way that is compliant with a local authority’s statutory duties, reduces risk, and represents best value. The duty to make Minimum Revenue Provision (MRP) is an important component of the Framework. Where local