Office of Public Sector Information

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations amend the Local Authorities (Capital Finance and Accounting) (England) Regulations 2003 (“the 2003 Regulations”) and apply in relation to local authorities in England only.

Regulation 3 adds an additional class of income – sums received on the maturity of loan capital in the form of bonds – which is to be treated by local authorities as a capital receipt under Part 4 of the 2003 Regulations.

Regulation 4 substitutes new provisions for those in the 2003 Regulations which deal with the calculation of minimum revenue provision – the amount that a local authority charges to a revenue account in respect of the financing of capital expenditure. New regulation 28 replaces the requirement that local authorities undertake detailed calculations with a new duty to make prudent provision. New regulation 29 deals with deficiencies in minimum revenue provision in previous years.

Regulation 5 amends certain provisions of regulation 30C of the 2003 Regulations, which is concerned with premiums and discounts on loans taken out by local authorities that are repaid early, so that they mirror equivalent provisions in regulation 30B.

Regulation 6 inserts new regulations 30E and 30F into Part 7 of the 2003 Regulations. The new regulations give local authorities some flexibility in the way they account for stepped rate interest loans entered into before 9th November 2007 and financial guarantees they gave before that date.

A full impact assessment has not been produced for this instrument as no impact on the private or voluntary sectors is foreseen.