This note through providing answers to a number of Frequently Asked Questions highlights the value-for-money issues faced by Authorities that are considering using Prudential Borrowing to finance investments in residual waste treatment facilities. The note is intended for use by Authorities and their advisers undertaking appraisals of investment options; it does not substitute for the analytical work required as part of these options appraisals. This note is not intended to provide detailed guidance on how procurements utilising Prudential Borrowing will operate, but instead provide an overview of the key issues in relation to comparing procurements that utilise Prudential Borrowing with private finance.1
In considering whether to use Prudential Borrowings, Authorities are required by regulation to adhere to the Prudential Code (the Code), which has been developed as a professional code of practice to support Authorities in making their decisions. The following CIPFA guidance on Prudential Borrowing is available:
• CIPFA The Prudential Code for Capital Finance in Local Authorities (2003); and
• The Prudential Code for Capital Finance in Local Authorities - Guidance Notes for Practitioners (2004).
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1 For example this note does not cover issues such as recent changes to the Minimum Revenue Provision or the potential reduction in capital allowances available to procurements funded through Prudential Borrowing.