Capital strategy

Statutory framework

Our capital investment is carried out within the statutory framework laid down by the Local Government Act 2003 and regulations under that act. Accordingly, only expenditure which fits the definition of capital expenditure contained in the act or regulations pursuant to it will be capitalised.

Capital expenditure is defined by the 2003 act as that which falls to be capitalised in accordance with proper practices, which means in accordance with the code of practice on local authority accounting, published by the Chartered Institute of Public Finance and Accountancy (CIPFA), applicable to all local authorities.  Annex A sets out a summarised version of the definition provided by the code. In addition there are a number of other types of expenditure that have been defined by regulations as being treatable as capital in nature. Generally these do not apply to this council.

Please note: the act and regulations are framed in a permissive way, allowing local authorities to capitalise expenditure which fits the definition but not forcing them to capitalise such expenditure. We will decide, therefore, whether to include a project meeting the capital definition in its capital programme or to meet its cost from a revenue account.

We do not set a minimum amount for the capitalisation of expenditure (de minimis level). Accordingly, any expenditure complying with the above definition may be capitalised.

Capital finance regulations stipulate that amounts of less than £10,000 may not be treated as capital receipts. Accordingly, any such sums received, although otherwise capital in nature, will be credited to a revenue account.