We would like to remind Environmental Bodies (EBs) of the guidance levels referred to in the Administration Costs and Unspent Funds framework relating to administration costs and unspent funds, and recommend that if they are not meeting the guidance level, they take appropriate action before 31 March 2020.
In November 2018 we published our framework for reviewing, monitoring and managing the level of administration costs and unspent funds claimed and held by Environmental Bodies (EBs).
The aim of the framework is to help facilitate the delivery of two of HM Revenue & Customs (HMRC's) strategic priority objectives for the Landfill Communities Fund (LCF):
- The level of administration costs incurred by EBs, should be at or below the guidance level of 7.5 per cent of project expenditure; and
- The value of unspent funds held by EBs should be reducing year on year.
Unspent funds are those LCF funds remaining as a cash balance at the end of each reporting period, including committed and uncommitted funds. EBs are required to state within their Statutory Annual Return whether these funds are committed to projects or required for winding up. Any other funds are classed as uncommitted. The guidance is that an EB's total unspent funds at year end should be no more than 1.5 times an EB's LCF income (including contributions and transfers) in that year.
You can access the framework on the Administration Costs and Unspent Funds page of our website. You can also access the updated guidance on the unspent funds level in section 3.6 of our Guidance Manual and the guidance on administration costs in section 3.12 of our Guidance Manual both of which can be found on the Guidance page of our website.