(3) Each such account must be kept in accordance with the provisions
of this Schedule that apply to a levy account.

(4) The Secretary of State—

(a) must keep each such account in such form as the Treasury
5may direct, and

(b) must, at such time as the Treasury may direct, send copies
of each such account to the Comptroller and Auditor
General.

(5) The Comptroller and Auditor General—

(a) 10must examine, certify and report on any account of which
copies are sent to the Comptroller and Auditor General
under sub-paragraph (4), and

(b) must arrange for copies of the account and of the
Comptroller and Auditor General’s report on it to be laid
15before each House of Parliament.

Credits and debits

18 (1) For each year the following are to be credited (as items of account)
to the levy account kept for the year—

(a) amounts received by the Secretary of State in the year
20under paragraph 22 (levy payments), and

(b) amounts received by the Secretary of State in the year
under regulations under paragraph 26 (payments on
account).

(2) For each year the following are to be debited (as items of account)
25to the levy account kept for the year—

(a) payments made by the Secretary of State in the year under
paragraph 25 (safety net payments),

(b) payments made by the Secretary of State in the year under
regulations under paragraph 26, and

(c) 30payments made by the Secretary of State in the year under
paragraph 28 (distribution of remaining balance).

End of year calculations

19 (1) As soon as is reasonably practicable after the end of each year, the
Secretary of State must calculate—

(a) 35the aggregate of the items of account credited to the levy
account kept for the year, and

(b) the aggregate of the items of account debited to the levy
account kept for the year.

(2) If the aggregate mentioned in sub-paragraph (1)(a) exceeds that
40mentioned in sub-paragraph (1)(b), an amount equal to the excess
must be—

(a) debited (as an item of account) to the levy account kept for
the year, and

(b) credited (as an item of account) to the levy account kept for
45the next year.

(3) If the aggregate mentioned in sub-paragraph (1)(b) exceeds that
mentioned in sub-paragraph (1)(a), an amount equal to the excess
must be—

(a) credited (as an item of account) to the levy account kept for
5the year, and

(b) debited (as an item of account) to the levy account kept for
the next year.

Part 7 Levy payments, safety net payments and distribution of remaining
10balance

Regulations about calculation of levy payments

20 (1) The Secretary of State may by regulations make provision for
calculating—

(a) whether a relevant authority is required to make a
15payment under this Part of this Schedule (a “levy
payment”) to the Secretary of State for a year, and

(b) if so, the amount of the levy payment.

(2) The regulations must make provision for calculations for a year to
be made after the end of that year.

(3) 20The regulations may, in particular, make provision for
calculations in relation to a relevant authority to be made—

(a) if the relevant authority is a billing authority, by reference
to the total paid to it in respect of the year under sections
43 and 45, subject to such adjustments as may be specified
25in the regulations;

(b) if the relevant authority is a major precepting authority, by
reference to the total paid to it for the year under
regulations under paragraph 8 (payments by billing
authorities to major precepting authorities), subject to such
30adjustments as may be specified in the regulations;

(c) by reference to payments of a kind specified in the
regulations made to the authority by the Secretary of State;

(d) by reference to such other factors as may be specified in the
regulations.

(4) 35The regulations may, in particular, make provision for
adjustments to an amount calculated under provision made under
sub-paragraph (3) by reference to changes affecting the calculation
of such an amount for an earlier year but not taken into account in
that calculation.

40Calculation of levy payments

21 (1) The Secretary of State must calculate in relation to each relevant
authority—

(a) whether it is required to make a levy payment for a year,
and

(b) 45if so, the amount of that payment.

(2) The calculation must be made—

(a) as soon as is reasonably practicable after the end of the
year, or

(b) if a direction is given to the authority under paragraph 40
5(direction to make calculations or supply information) for
the purposes of this paragraph, as soon as is reasonably
practicable after the time specified in the direction,

whichever is the later.

(3) The calculation must be made in accordance with regulations
10under paragraph 20.

(4) As soon as is reasonably practicable after making a calculation in
relation to a relevant authority, the Secretary of State must notify
that authority of—

(a) whether, in accordance with the calculation, it is required
15to make a levy payment for the year, and

(b) if so, the amount of that payment in accordance with the
calculation.

Levy payments following calculations

22 (1) If a calculation under paragraph 21 shows that a levy payment is to be
20made to the Secretary of State by a relevant authority, the authority must
make that payment to the Secretary of State.

(2) The levy payment—

(a) must be made on or before such day and in such manner
as the Secretary of State may specify, and

(b) 25if not made on or before that day, is recoverable in a court
of competent jurisdiction.

Regulations about calculation of safety net payments

23 (1) The Secretary of State may by regulations make provision for
calculating—

(a) 30whether the Secretary of State is required to make a
payment under this Part of this Schedule (a “safety net
payment”) to a relevant authority for a year, and

(b) if so, the amount of the payment.

(2) The regulations must make provision for calculations for a year to
35be made after the end of that year.

(3) The regulations may, in particular, make provision for
calculations in relation to a relevant authority to be made—

(a) if the relevant authority is a billing authority, by reference
to the total paid to it in respect of the year under sections
4043 and 45, subject to such adjustments as may be specified
in the regulations;

(b) if the relevant authority is a major precepting authority, by
reference to the total paid to it for the year under
regulations under paragraph 8 (payments by billing
45authorities to major precepting authorities), subject to such
adjustments as may be specified in the regulations;

(c) by reference to payments of a kind specified in the
regulations made to the authority by the Secretary of State;

(d) by reference to such other factors as may be specified in the
regulations.

(4) 5The regulations may, in particular, make provision for
adjustments to an amount calculated under provision made under
sub-paragraph (3) by reference to changes affecting the calculation
of such an amount for an earlier year but not taken into account in
that calculation.

10Calculation of safety net payments

24 (1) The Secretary of State must calculate in relation to each relevant
authority—

(a) whether the Secretary of State is required to make a safety
net payment to the authority for the year, and

(b) 15if so, the amount of that payment.

(2) The calculation must be made—

(a) as soon as is reasonably practicable after the end of the
year, or

(b) if a direction is given to the authority under paragraph 40
20(direction to make calculations or supply information) for
the purposes of this paragraph, as soon as is reasonably
practicable after the time specified in the direction,

whichever is the later.

(3) The calculation must be made in accordance with regulations
25under paragraph 23.

(4) As soon as is reasonably practicable after making a calculation
under this paragraph in relation to a relevant authority, the
Secretary of State must notify that authority of—

(a) whether, in accordance with the calculation, the Secretary
30of State is required to make a safety net payment to the
authority for the year, and

(b) if so, the amount of that payment in accordance with the
calculation.

(5) This paragraph is subject to regulations under paragraph 26
35(payments on account).

Safety net payments following calculations

25 (1) If a calculation under paragraph 24 shows that a safety net payment is to
be made by the Secretary of State to a relevant authority, the Secretary of
State must make that payment to the authority.

(2) 40The safety net payment must be made in instalments of such
amounts, and at such times, as the Secretary of State determines
with the Treasury’s consent.

(3) This paragraph is subject to regulations under paragraph 26
(payments on account).

Regulations about payments on account

26 (1) The Secretary of State may by regulations make provision—

(a) for a relevant authority to request the Secretary of State to
make a calculation before the end of a year (an “in-year
5calculation”) of—

(i) whether the Secretary of State is likely to be
required to make a safety net payment under
paragraph 25 to the authority for the year, and

(ii) if so, the amount of the payment;

(b) 10about the time at which and the manner in which a request
must be made, and the information that must be provided
in connection with the request;

(c) about the circumstances in which the Secretary of State
may or must make an in-year calculation in response to a
15request;

(d) about the making of an in-year calculation, including for
the Secretary of State to make the calculation by reference
to estimates of any of the amounts mentioned in paragraph
23(3).

(2) 20The regulations may make provision—

(a) about the timing of an in-year calculation in response to a
request;

(b) about the notification of the results of an in-year
calculation to the relevant authority to whom it relates;

(c) 25for the making, as a result of the calculation, of a payment (a
“payment on account”) to the authority before the end of the year
to which the calculation relates.

(3) The regulations may, in particular—

(a) make provision in relation to an in-year calculation that is
30similar to that made by paragraph 24, or apply that
paragraph with modifications in relation to such a
calculation;

(b) make provision in relation to a payment on account that is
similar to that made by paragraph 25, or apply that
35paragraph with modifications in relation to such a
payment.

(4) The regulations may make provision—

(a) about the calculation under paragraph 24 to be made in
relation to a relevant authority for a year where a payment
40on account has been made to the authority for the year;

(b) for the making of a further payment by the Secretary of State to
the authority, or of a payment by the authority to the Secretary
of State, as a result of that calculation.

Calculation of remaining balance on levy account

27 (1) 45The Secretary of State must, in each year other than the first year
for which this paragraph has effect, calculate whether there is a
remaining balance on the levy account for the year.

(2) The calculation must be made as soon as is reasonably practicable
after—

(a) all of the calculations required by paragraph 21(1)
(calculations of levy payments) have been made for the
5previous year, and

(b) all of the calculations required by paragraph 24(1)
(calculations of safety net payments) have been made for
the previous year.

(3) The calculation must be made as follows—

10Step 1

Calculate the aggregate of the amounts of all of the levy payments
calculated for the previous year under paragraph 21(1).

Step 2

Add any amount credited to the levy account for the year in
15accordance with paragraph 19(2) (credit from previous year) to the
amount found under step 1, or subtract any amount debited to
that account in accordance with paragraph 19(3) (debit from
previous year) from the amount found under step 1.

Step 3

20Subtract from the amount found under steps 1 and 2 the aggregate
of the amounts of all the safety net payments calculated for the
previous year under paragraph 24(1).

Step 4

(4) If the amount found under step 4 in sub-paragraph (3) is a positive
25amount, that is the remaining balance on the levy account for the
year.

Distribution of remaining balance

28 (1) The Secretary of State may determine that an amount equal to the
whole or part of the remaining balance on a levy account for a year
30is to be distributed among one or more relevant authorities (rather
than being treated in accordance with paragraph 19(2)).

(2) If the Secretary of State makes a determination under sub-
paragraph (1), the amount referred to in that sub-paragraph may
not be distributed unless—

(a) 35the basis (“the basis of distribution”) on which the
Secretary of State intends to make the distribution is
specified in a local government finance report, and

(b) the report is approved by resolution of the House of
Commons.

(3) 40Before making such a local government finance report, the
Secretary of State must notify such representatives of local
government as the Secretary of State thinks fit of the general
nature of the basis of distribution.

(4) If such a report is approved by resolution of the House of
45Commons, the Secretary of State must calculate what amount (if

any) falls to be paid to each relevant authority as its share of the
amount referred to in sub-paragraph (1).

(5) The calculations must be made—

(a) as soon as is reasonably practicable after the report is
5approved, and

(b) in accordance with the basis of distribution specified in the
report.

(6) As soon as is reasonably practicable after making the calculations,
the Secretary of State must notify each relevant authority of—

(a) 10whether a payment is to be made by the Secretary of State
to the authority out of the amount referred to in sub-
paragraph (1), and

(b) if such a payment is to be made, the amount of the
payment.

(7) 15If the calculations show that a payment is to be made by the Secretary of
State to a relevant authority, the Secretary of State must make that
payment to the authority.

(8) A payment from the Secretary of State to a relevant authority
under this paragraph must be made—

(a) 20at such time, or

(b) in instalments of such amounts and at such times,

as the Secretary of State determines with the Treasury’s consent.

Relationship with other provisions

29 This Part is subject to Parts 9 (pooling of authorities) and 10
25(designation of areas and classes of hereditament).

Part 8 Transitional protection payments

Regulations about deemed and actual rating income

30 (1) The Secretary of State may by regulations make provision for
30calculating in accordance with the regulations—

(a) the total amount which would be payable to a billing
authority in England in respect of a year under sections 43
and 45 if—

(i) regulations under section 57A (transitional relief
35following compilation of local rating list) were not
in force for the year, and

(ii) the authority acted diligently, and

(b) the total amount which would be payable to a billing
authority in England in respect of a year under sections 43
40and 45 if the authority acted diligently.

(2) The regulations may include provision for adjustments to be made
to an amount calculated under provision under sub-paragraph (1).

(3) The regulations may, in particular, make provision for
adjustments to that amount by reference to changes affecting the
calculation of such an amount for an earlier year but not taken into
account in that calculation.

(4) 5In this Part of this Schedule—

(a) a billing authority’s “deemed rating income” for a year
means the amount calculated for the authority and the year
under provision under sub-paragraph (1)(a) and (2), and

(b) a billing authority’s “actual rating income” for a year
10means the amount calculated for the authority and the year
under provision under sub-paragraph (1)(b) and (2).

Regulations about transitional protection payments

31 (1) The Secretary of State may by regulations make provision for the making
of a payment (a “transitional protection payment”) for a year—

(a) 15by the Secretary of State to a billing authority in England, or

(b) by a billing authority in England to the Secretary of State.

(2) The regulations must provide for the amount (if any) of a
transitional protection payment in relation to an authority for a
year to be calculated by reference to its deemed and actual rating
20income for the year, so that—

(a) if its deemed rating income for a year exceeds its actual
rating income for the year, the Secretary of State is to be
liable to make a transitional protection payment to the
authority for the year of an amount equal to the excess;

(b) 25if its actual rating income for a year exceeds its deemed
rating income for the year, the authority is to be liable to
make a transitional protection payment to the Secretary of
State for the year of an amount equal to the excess;

(c) if its deemed rating income for a year is equal to its actual
30rating income for the year, no transitional protection
payment is to be made to or by the authority for the year.

(3) The regulations may, in particular, make provision—

(a) about the making of calculations, and the supply of
information to the Secretary of State, by a billing authority
35in connection with the determination of the transitional
protection payment (if any) to be made to or by the
authority;

(b) about the assumptions and adjustments to be made, and
the information to be taken into account, in making such
40calculations;

(c) about the consequences of non-compliance with provision
under paragraph (a) or (b), including (in particular)—

(i) for the making by the Secretary of State of
calculations, or of assumptions as to the
45information that would otherwise have been
supplied by the authority;

(ii) for the suspension of payments to the authority.

(4) The regulations may, in particular, make provision—

(a) for the making by a billing authority or the Secretary of
State of a payment on account of a transitional protection
payment;

(b) for the calculation, where a payment on account has been
5made, of the amount of the final transitional protection
payment (if any) to be made to or by the authority;

(c) for the audit of calculations made, or information supplied
to the Secretary of State, by a billing authority in
connection with the determination of the final transitional
10protection payment (if any) to be made to or by the
authority;

(d) about the consequences where a calculation or information
certified by the audit does not match that made or supplied
by the authority, including (in particular) about the use of
15the certified calculation or information;

(e) about the making of financial adjustments where the final
transitional protection payment to be made to or by the authority
for the year is different from a payment on account made to or by
the authority for the year.

(5) 20The regulations may in particular make provision about the time
and manner in which a payment under the regulations is to be
made (including for payment by instalments), and as to the
consequences of non-payment.

Part 9 25Pooling of authorities

Designation of pool of authorities

32 (1) The Secretary of State may, in accordance with this paragraph,
designate two or more relevant authorities as a pool of authorities
for the purposes of the provisions of this Schedule applying to
30such pools (as to which, see paragraphs 34 and 35).

(2) The Secretary of State may make a designation only if each
authority covered by the designation has agreed to it.

(3) The Secretary of State—

(a) may revoke a designation (in particular if any condition of
35the designation is breached), and

(b) must do so if any authority covered by the designation
asks the Secretary of State to do so.

(4) Subject to sub-paragraph (5), a designation has effect—

(a) for the year beginning after it is made, and

(b) 40for each subsequent year, unless previously revoked.

(5) A designation or revocation has effect for a year only if it is made
before the Secretary of State gives the notification for the year
required by paragraph 10(2) (notification of general basis of
calculation to be specified in local government finance report for
45year).

(6) Before making or revoking a designation, the Secretary of State
must consult such of the persons that the Secretary of State thinks
are likely to be affected by the designation or revocation as the
Secretary of State thinks fit.

(7) 5After making or revoking a designation, the Secretary of State
must notify—

(a) the authorities covered by the designation, and

(b) the persons consulted under sub-paragraph (6).

(8) A notification under sub-paragraph (7) must be given before or at
10the same time as the Secretary of State gives the notification
required by paragraph 10(2) for the year to which the designation
or revocation relates.

Designations subject to conditions

33 (1) A designation under paragraph 32 must be made subject to
15conditions—

(a) requiring the authorities to which it relates to appoint a
lead authority to exercise the functions specified in the
conditions, and

(b) requiring the authorities, if the designation is revoked, to
20take the steps specified in the conditions before the
revocation takes effect.

(2) A designation under paragraph 32 may be made subject to such
other conditions as the Secretary of State thinks fit.

(3) The Secretary of State may vary a designation by—

(a) 25adding a condition,

(b) modifying a condition, or

(c) removing a condition (other than one mentioned in sub-
paragraph (1)).

(4) Before varying a designation under sub-paragraph (3), the
30Secretary of State must consult such persons likely to be affected
by the variation as the Secretary of State thinks fit.

(5) After varying a designation under sub-paragraph (3), the
Secretary of State must notify—

(a) the authorities covered by the designation, and

(b) 35the persons consulted under sub-paragraph (4).

Effect of designation in relation to Part 5

34 (1) Where a designation of a pool of authorities has effect for a year,
Part 5 of this Schedule (principal payments in connection with
local retention of non-domestic rates) applies in relation to the
40pool as if—

(a) the authorities in the pool were not relevant authorities,
but

(b) the pool were itself a relevant authority.

(2) Sub-paragraph (1) does not apply in relation to paragraph 13(5)
45(duty to send copy of amending report to each relevant authority).