"
(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
(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 -
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)[13];
"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[14];
"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)[15], 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)[16] 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)[17];
"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.".
Use of amounts set aside under the Local Government and Housing Act 1989
7.
In regulation 33 of the Principal Regulations (use of amounts set aside under the Local Government and Housing Act 1989) -
(a) in paragraph (1) -
(i) at the beginning, there shall be inserted "Subject to paragraph (4),"; and
(ii) after "may treat", there shall be inserted "the whole or part of";
and
(b) at the end, there shall be added -
"
(4) Any decision to treat the whole or part of the amount specified in paragraph (2) as if it were a capital receipt, by virtue of paragraph (1), shall be made by the local authority before 1st October 2005.
(5) Any amount treated as if it were a capital receipt, by virtue of paragraph (1), shall be treated as if it were received during the financial year beginning on 1st April 2004.".
Signed by authority of the Secretary of State
Nick Raynsford
Minister of State Office of the Deputy Prime Minister
18th November 2004
EXPLANATORY NOTE
(This note is not part of the Regulations)
These Regulations amend the Local Authorities (Capital Finance and Accounting) (England) Regulations 2003 ("the Principal Regulations") and apply only in relation to local authorities in England.
Regulation 2 of these Regulations inserts a definition of "small scale disposal", and other definitions for the purposes of that term, into regulation 1(5) of the Principal Regulations. A small scale disposal is a disposal by a local authority of an interest in housing land where the Secretary of State has consented to the disposal subject to the local authority being satisfied that the majority of secure and introductory tenants are not opposed to it. A disposal is not a small scale disposal unless the aggregate number of dwelling-houses disposed of by the authority in the five year period ending on the date of the disposal does not exceed 499.
Regulation 3 of these Regulations provides for small scale disposals to be excluded from the requirements to pool receipts from the disposals of housing land that are in regulation 12 of the Principal Regulations.
Some local authorities acquired dwellings and other land from the Commission for the New Towns (now, together with the Urban Regeneration Agency, known as English Partnerships) or a development corporation on the basis that the whole or part of the consideration for the land was to be given by the local authority when it subsequently disposed of the land. Regulation 4 of these Regulations inserts a new regulation 20A in the Principal Regulations. This provides that, for the purposes of the pooling of a percentage of the capital receipts, derived from housing land, under regulation 12 of the Principal Regulations, the capital receipts may be treated as reduced by an amount equal to the value of the consideration that the local authority is required to give English Partnerships on making the disposal.
Regulation 5 of these Regulations excludes small scale disposals from those disposals for which notional capital receipts have to be determined under regulation 22 of the Principal Regulations.
Regulation 6 of these Regulations amends the provisions in regulation 28 of the Principal Regulations concerning the calculation of minimum revenue provision. The calculation is amended to reflect the differences between local authorities which are housing authorities, required to keep a Housing Revenue Account, and other local authorities. The latter would not have had a housing amount and a non-housing amount under Part XII of the Local Authorities (Capital Finance) Regulations 1997 nor do they have an opening HRA capital financing requirement. Where the capital financing requirement at the end of the preceding financial year is a nil or negative amount, the minimum revenue provision (including any additional amount of minimum revenue provision) for the current financial year is to be treated as nil.
Regulation 7 requires that any decision, to treat an amount as a capital receipt under regulation 33, must be made before 1st October 2005. Any amount treated as a capital receipt is to be treated as if it were received in the financial year beginning on 1st April 2004.
A full regulatory impact assessment has not been produced for this instrument as it has no impact on the costs of businesses, charities or voluntary bodies; neither does it have significant financial impact on any public bodies.
Notes:
[1]
2003 c. 26.back
[2]
As regards the application of Part 1 of the Local Government Act 2003 to Wales, see section 24 of that Act.back
[3]
S.I. 2003/3146, amended by S.I. 2004/534.back
[4]
1993 c. 28.back
[5]
See, in particular, paragraph (b) of subsection (14) of section 135.back
[6]
See, in particular, subsection (13) of section 135.back
[7]
1996 c. 52.back
[8]
1985 c. 68.back
[9]
Sections 32 and 43 were amended by S.I. 1997/74 and section 43 was amended by section 132 of the Housing Act 1988 (c. 50). There are other amendments to sections 32 and 43 that are not relevant to these Regulations.back
[10]
1981 c. 64. Section 36 was amended by sections 1 and 14 of, and paragraph 4 of Schedule 3 and Schedule 4 to, the New Towns and Urban Development Corporations Act 1985 (c. 5) and S.I. 1998/85.back
[11]
1989 c. 42; relevant regulations made under section 172 are the New Towns (Transfer of Housing Stock) Regulations 1990 (S.I. 1990/1700, amended by S.I. 1990/2366 and 1991/1281).back
[12]
See sections 3 (establishment of development corporations for new towns) and 35 (establishment of the Commission).back
[13]
1985 c. 68. Section 27 was substituted by S.I. 2003/940.back
[14]
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.back
[15]
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).back
[16]
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).back
[17]
S.I. 2003/533; paragraph (5) of regulation 7 was substituted by S.I. 2004/556.back
ISBN
0 11 050349 X
|
© Crown copyright 2004 |
Prepared
29 November 2004
|
