Appendix A – Prudential Code for Capital Finance

The Prudential Code for Capital Finance in Local Authorities (Prudential Code) is applicable to the Police and Crime Commissioner and has been developed by the Chartered Institute of Public Finance and Accountancy (CIPFA) to provide a code of practice to underpin the system of capital finance embodied in Part 1 of the Local Government Act 2003. PCCs, like Local Authorities, are free to determine their own level of capital investment controlled by self-regulation.

The key objectives of the Prudential Code are to ensure that capital investment plans are affordable, prudent and sustainable.

The Prudential Code supports a system of self-regulation that is achieved by the setting and monitoring of a suite of Prudential Indicators that directly relate to each other.  The indicators establish parameters within which the PCC should operate to ensure the objectives of the Prudential Code are met.

In setting the prudential indicators, the PCC must give due regard to the following matters:-

• Service objectives, e.g. strategic planning for the authority
• Stewardship of assets,
• Value for money, e.g. option appraisal
• Prudence and sustainability
• Affordability
• Practicality, e.g. achievability

The Prudential Indicators below will also be reported in the PCC’s 2023/24 Treasury management strategy which will be reported to Joint Audit and Standards Committee in March 2023. The PCC has adopted the Chartered Institute of Public Finance and Accountancy (CIPFA): Code of Practice for Treasury Management in the Public Services. The Prudential Indicators for which the PCC is required to set limits are as follow overleaf:

PRUDENTIAL INDICATORS – Warwickshire