Dorset Council expecting £45M in savings over the next 10 years
Dorset Council say financial experts have told the authority that the changes are “ultra-prudent” and low risk
Dorset Council has re-scheduled its finances – expecting to see a £45million saving over ten years.
An extra £6m from the exercise could be generated in this financial year which runs until April 2026.
Dorset Council say financial experts have told the authority that the changes are “ultra-prudent” and low risk.
Said Chickerell councillor, Simon Clifford, the Dorset Council Cabinet Member for Finance and Capital Strategy: “Changes to how the council sets money aside for borrowing were agreed at an extraordinary meeting of Dorset Council on 25 March.
“The Council report sets out that a change to the policy will see a £45 million saving over 10 years, after adjusting for interest, with around £6 million expected to be seen this financial year.
“Where local authorities finance capital expenditure with debt, they must set aside an amount of money each year to ensure that debt can be repaid, known as the Minimum Revenue Provision (MRP).
“The change in MRP policy is a change to the method of calculating the provision charged to the revenue account, which is not the same as ‘remortgaging’ a debt. The decision means cash set aside will more accurately reflect the typical length of time of an asset. It is fairer for council tax-payers and has the advantage of freeing up much needed cash for the coming years.
“Council financial experts reviewed the current approach and said it was ultra prudent. Making this change was low risk as it fixed rates over a long term so we can plan for the changes.”