- A full financial appraisal must accompany each request. The appraisal must clearly demonstrate the savings to be achieved by the proposal. Any increased income forecasts must be justified and demonstrable.
- Only schemes that demonstrate future budget savings that will enable the sum ‘borrowed’ including interest to be repaid within 4 years will be considered.
- Amounts borrowed must be repayable within a maximum of 4 years of the year of borrowing i.e. borrowing in 2001/02 must be repaid by 2005/06. The repayment should be made as soon as possible to enable other schemes to be considered. Thus if the payback period is less than 4 years the repayments will reflect that.
- Interest on borrowing in a year will be fixed at the previous September and remain fixed for the period of the loan.
- Repayment, covering interest and principal, will be in equal annual instalments, be a first charge to the budget and must be honoured regardless of any future budget reductions or structural changes.
- The total cost of the scheme will in the first instance be a charge to the service revenue account and will thus count against the relevant Performance Indicator. The loan will be credited to the service by way of an appropriation from central reserves.
- Repayments will be made as appropriations and therefore will not count against future years’ Performance Indicators.
- The loan will be to a maximum of the original requested sum. If any additional unexpected expenditure is incurred as a result of the proposal, this will have to be met by the service of be subject to a separate bid.
- The relevant service accountant must countersign the application as must the Business Unit Head/Director? The form of the application will be determined by the Section 151 Officer.
(Click here for the Borrow to Invest to Save application proforma)
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