Public reports pack PDF 3 MB - Blaby District Council

against a profiled budget of £62,346. However, it is still anticipated that the
original budgeted income target for 2012/13 will be achieved.
6.3.10 Minimum Revenue Provision (MRP) – Proxy for Depreciation
In addition to meeting the interest charges on loans each year the Council is
also statutorily required to set-aside funds to meet the principal element of
loan repayments. This is referred to as the Minimum Revenue Provision
which, from a prudence perspective, is the minimum amount that has to be
charged within the Council’s accounts.
Every Council is required to have in place a policy in respect of MRP. The
Council’s approved policy in relation to the charging of Minimum Revenue
Provision (MRP) is as follows:
• Historic debt incurred prior to the introduction of the Prudential Code on 1 st
April, 2004 will be charged using the regulatory method, i.e. at the rate of
4% per annum on a reducing balance basis
• MRP in respect of assets acquired under Finance Lease will be charged
at a rate equal to the principal element of the annual lease rental for the
year in question
• Prudential borrowing incurred since 1 st April, 2004 will attract MRP using
the asset life method, and will be charged over a period which is
reasonably commensurate with the estimated useful life applicable to the
nature of the expenditure, using equal annual instalments. For example,
capital expenditure on a new building, or on the refurbishment or
enhancement of a building, will be related to the estimated life of that
building
The MRP liability for 2012/13 is now estimated at £550,951 compared with the
approved budget of £564,846, representing a decrease of £13,895. The latest
estimate for MRP includes provision for repayment of new borrowing
undertaken to finance capital schemes, and reflects a change in the method
of calculating the annual repayment in respect of borrowing to fund disabled
facilities grants to more accurately reflect the useful life of the assets being
funded.
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