The recent consultation to changes in the Minimum Revenue Provision regime in England has now closed and has prompted criticism of some of the more extreme approaches taken by local authorities in terms of MRP policy.
With DLUHC tightening up what it sees as loopholes in the current guidance, there will be some Councils which find their policy is no longer fit for purpose, or worse wasn’t compliant in the first place.
Now is the time to review your current MRP strategy to ensure it is fully compliant with the existing rules as well as considering the impact of the changes suggested in the consultation, knowing the potential significance of the changes to the council’s budget as far in advance as possible will allow early planning and reduce the impact of nasty surprises, especially during the audit period.
At Arlingclose we have undertaken several MRP Health Checks which have focused on the following areas:
- Compliance with current guidance – is the MRP strategy fully compliant with the current guidance? Are the freedoms available being used? Are there some areas which could be open to challenge?
- A review of current calculations to identify any potential errors – in some of our recent reviews we have found errors in calculations going back several years which when corrected have reduced MRP charges going forward.
- Consideration of the potential changes to the guidance – if as expected some of the current “loopholes” are to be closed off with effect from 1st April 2023 then what is the potential impact on your revenue budget? Recent reports have already identified one local authority that is having to find £6million a year due to a change in MRP policy on its commercial investment portfolio, can your budget absorb additional MRP charges?
- Planning for the potential changes and looking at ways to mitigate the impact on your revenue budget.
Whilst we await the outcome of the consultation, we feel it is worthwhile carrying out a review of where you are now and where you could be once any amendments are announced as with any changes in policy it is better to be prepared for the potential impact at an early stage.
If you would like to discuss this further, then please contact mswallow@alingclose.com.
Related Insights
-960x640.webp&w=3840&q=75)
