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Prudential Code Steering Group (PCSG)

This page contains historical information about the development of the Prudential Code. For current information please click here.

Prudential Code approved by the CIPFA Council

The Institute Council on 11 September approved the CIPFA Prudential Code for Capital Finance in Local Authorities. The final Code incorporates the recommendations made at the meeting of the Prudential Code Steering Group on 8 July 2003. The minutes of that meeting can be found below. The Code has been published, was revised in 2009 and is available to purchase online. Implementation of the Code in England, Wales and Scotland depends on legislation.

Role of the PCSG
Capital Success: Good Practice in the Implementation of the Prudential Code
The Prudential Code for Capital Finance in Local Authorities: Fully Revised Guidance Notes for Practitioners 2007
Prudential Code published
Press Release:
CIPFA’s Prudential Code paves the way for improved local authority asset management
Discussion Paper on Depreciation
Papers from PCSG Meetings
Panel Membership
Road Testing the Prudential Code
You Can Go Your Own Way - Public Finance article (29 November 2002)
IPF Analysis of CIPFA's Exposure Draft on Prudential Code
Useful links

Role

The Prudential Code Steering Group reports to the CIPFA Treasury Management Panel. It is undertaking the development work for a Prudential Code that will underpin a new system of local authority capital finance.

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PUBCF022The Prudential Code for Capital Finance in Local Authorities (Fully Revised Second Edition 2009)

This fully revised second edition of CIPFA’s Prudential Code for Capital Finance in Local Authorities (the Prudential Code) has been updated following consultation on its original implementation and following the fall-out of the Icelandic Banks crisis. Local Authorities are required by regulation to have regard to the Prudential Code when carrying out their duties in England and Wales under Part 1 of the Local Government Act 2003, and in Scotland under Part 7 of the Local Government in Scotland Act 2003.


CF016Capital Success: Good Practice in the Implementation of the Prudential Code

The introduction of the Prudential Framework is a striking success for local government. It has given local authorities the freedom to make their own capital investment decisions based on locally calculated indicators reflecting their individual circumstances. This new title shows what has already been achieved and provides inspiration for the delivery of yet more service improvements in the future. Click here for more details.




CF013The Prudential Code for Capital Finance in Local Authorities: Fully Revised Guidance Notes for Practitioners 2007

The Prudential Framework for local authority capital investment was introduced through the Local Government Act 2003 and the Local Government in Scotland Act 2003. Since its introduction the Prudential Code has had a real beneficial impact on the way local authorities plan for and finance capital investment. During this period there have been a number of changes in both accounting policies, through changes to the SORP, and legislation.

Whilst the Prudential Code as a principles-based code has itself remained unchanged, CIPFA has totally revised and updated the guidance notes for practitioners to reflect these significant changes and the experiences of practitioners to date.

The guidance concentrates on the application of the Code in respect of issues of affordability, prudence and sustainability. It is commended to finance professionals within local government and to others, especially service and property managers, seeking a thorough understanding of its technical application.

Discussion Paper: The Role that Depreciation Could Play in Local Government Finance

CIFPA has published a discussion paper on the role that depreciation could play in local government finance. Download the paper here. (PDF size 270k)

Your views on the paper would be most welcome and should be sent to maureen.wellen@cipfa.org.

Please also visit the Capital Review section for additional information.

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Papers from PCSG Meetings

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Panel Membership

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Road Testing the Prudential Code

CIPFA road tested the draft Prudential Code for Capital Finance in Local Authorities during 2002. The prudential framework will be a radical departure from the current highly centralised capital control frameworks, and road testing was an important step leading towards the introduction of the new system.

Road testing involved:

Demand for participation in the road testing exceeded our expectations, with 70 local authorities in England, 4 in Wales and 10 in Scotland offering to road test the code. This was a very positive outcome, which demonstrated the high level of interest in the further development of the prudential framework. However, unfortunately, it meant that we were not able to accept all the offers that people made to contribute. Participants were selected by date of response subject to the need to ensure a suitable range of authorities.

The following local authorities road tested the code:

We greatly value all the offers we have received from people to participate.

(NB The phrase 'road testing' was used rather than 'undertaking pilots' because participating authorities remained subject to their current control frameworks, ie they did not set their own prudentially determined limits for borrowing during road testing.)

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Useful Links

CIPFA Prudential Code - NEW
ODPM
Welsh Assembly
Scottish Parliament
CIPFA Technical Press Releases