Consultation on changes to the capital framework: Minimum Revenue Provision

Closed 8 Feb 2022

Opened 30 Nov 2021


Local authorities can freely borrow and invest under legislation and guidance known as the Prudential Framework. Notwithstanding these freedoms, authorities must make sure borrowing is affordable. Where capital expenditure is financed by borrowing, authorities have a statutory duty to set aside revenue funds to repay the principle of the debt; this is known as Minimum Revenue Provision (MRP).  The government has identified that some authorities are not sufficiently complying with this duty and is proposing changes to regulations to make sure that practices are prudent and consistent across the sector.

Why your views matter

The government is seeking views on the proposed changes to:

  1. Make sure that the changes are clear and will appropriately meet the government’s objectives.
  2. Identify potential unintended consequences that could negatively impact the delivery of services or local and national priorities.
  3. Understand the financial impact to the sector.
  4. Determine the appropriate timing for the changes to be implemented.