MPA & MPS Budget book 2006-07

MPA Revenue and Capital Budget Book 2006/07
TECHNICAL ASSUMPTIONS
Capital Expenditure Classification of expenditure is undertaken in
accordance with accounting principles as laid down
within the CIPFA Statement of Recommended Practice
(SORP). Capital expenditure broadly comprises of (i)
the acquisition, reclamation, enhancement or laying out
of land, exclusive of roads, buildings, and other
structures: (ii) the acquisition, construction, preparation,
enhancement or replacement of roads, buildings, and
other structures; and (iii) the acquisition, installation or
replacement of movable or immovable plant, machinery
and apparatus and vehicles and vessels.
Capital Grant
Grant is paid by the Home Office as a source of finance
to support capital expenditure. It is not project specific.
Capital Grant Reserve
All available capital grant is credited to this account and
used as appropriate to fund capital expenditure.
De Minimis Level
A lower limit of £5,000 operates for the classification of
expenditure as capital on the acquisition, renewal or
replacement of buildings, vehicles, plant, machinery or
other equipment. This is known as the de minimis level.
Below this level, it is prudent to regard expenditure on
assets as revenue in nature.
Prudential Code
The Prudential Code allows local authorities to borrow
money to fund capital expenditure provided that capital
spending plans are affordable, prudent and sustainable.
It sets out indicators and factors that must be taken into
account when demonstrating that these objectives have
been fulfilled. Any increase above existing levels of
borrowing arising from the Prudential Code is not
supported by Government grant.
Specific Capital Grant
Grant paid in support of a named capital project and
usually in accordance with special legislative powers.
Such grants will usually come from Government
departments, local authorities, etc.
Specific Earmarked Reserve
A reserve that contains funds specifically identified or
paid to the MPS for a named project or programme of
works. At the present time a specific earmarked reserve
is maintained in respect of the C3i Programme of
works.
Supported Capital Expenditure
(Revenue)
Supported capital expenditure (revenue) is
a transitional replacement for supplementary credit
approvals and identifies the level of capital expenditure
financed through borrowing which in turn attracts
support through the local government revenue grant
settlement.
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