Local Government Finance Bill

Session 2012 - 13
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Local Government Finance Bill

Local Government Finance Bill
Schedule 1 — Local retention of non-domestic rates
22

Part 7
Levy payments, safety net payments and distribution of remaining
balance
Regulations about calculation of levy payments
20    (1)
The Secretary of State may by regulations make provision for
5
calculating—
(a)
whether a relevant authority is required to make a
payment 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.
10
      (2)
The regulations must make provision for calculations for a year to
be 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
15
to the total paid to it in respect of the year under sections
43 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
20
regulations under paragraph 8 (payments by billing
authorities 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;
25
(d)
by reference to such other factors as may be specified in the
regulations.
      (4)
The 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
30
of such an amount for an earlier year but not taken into account in
that calculation.
Calculation of levy payments
21    (1)
The Secretary of State must calculate in relation to each relevant
authority—
35
(a)
whether it is required to make a levy payment for a year,
and
(b)
if so, the amount of that payment.
      (2)
The calculation must be made—
(a)
as soon as is reasonably practicable after the end of the
40
year, or
(b)
if a direction is given to the authority under paragraph 40
(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,
45

whichever is the later.

Local Government Finance Bill
Schedule 1 — Local retention of non-domestic rates
23

      (3)
The calculation must be made in accordance with regulations
under 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—
5
(a)
whether, in accordance with the calculation, it is required
to 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
10
22    (1)
If a calculation under paragraph 21 shows that a levy payment is
to be made 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
15
as the Secretary of State may specify, and
(b)
if 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
20
calculating—
(a)
whether 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.
25
      (2)
The regulations must make provision for calculations for a year to
be 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
30
to the total paid to it in respect of the year under sections
43 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
35
regulations under paragraph 8 (payments by billing
authorities 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;
40
(d)
by reference to such other factors as may be specified in the
regulations.
      (4)
The 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
45

Local Government Finance Bill
Schedule 1 — Local retention of non-domestic rates
24

of such an amount for an earlier year but not taken into account in
that calculation.
Calculation of safety net payments
24    (1)
The Secretary of State must calculate in relation to each relevant
authority—
5
(a)
whether the Secretary of State is required to make a safety
net payment to the authority for the year, and
(b)
if so, the amount of that payment.
      (2)
The calculation must be made—
(a)
as soon as is reasonably practicable after the end of the
10
year, or
(b)
if a direction is given to the authority under paragraph 40
(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,
15

whichever is the later.
      (3)
The calculation must be made in accordance with regulations
under paragraph 23.
      (4)
As soon as is reasonably practicable after making a calculation
under this paragraph in relation to a relevant authority, the
20
Secretary of State must notify that authority of—
(a)
whether, in accordance with the calculation, the Secretary
of 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
25
calculation.
      (5)
This paragraph is subject to regulations under paragraph 26
(payments on account).
Safety net payments following calculations
25    (1)
If a calculation under paragraph 24 shows that a safety net
30
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)
The safety net payment must be made in instalments of such
amounts, and at such times, as the Secretary of State determines
35
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—
40
(a)
for a relevant authority to request the Secretary of State to
make a calculation before the end of a year (an “in-year
calculation”) of—

Local Government Finance Bill
Schedule 1 — Local retention of non-domestic rates
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(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)
about the time at which and the manner in which a request
5
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
request;
10
(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)
The regulations may make provision—
15
(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)
for the making, as a result of the calculation, of a payment
20
(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
similar to that made by paragraph 24, or apply that
25
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
paragraph with modifications in relation to such a
30
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
on account has been made to the authority for the year;
35
(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)
The Secretary of State must, in each year other than the first year
40
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)
45
(calculations of levy payments) have been made for the
previous year, and

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Schedule 1 — Local retention of non-domestic rates
26

(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—

Step 1
5

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
accordance with paragraph 19(2) (credit from previous year) to the
10
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

Subtract from the amount found under steps 1 and 2 the aggregate
15
of the amounts of all the safety net payments calculated for the
previous year under paragraph 24(1).

Step 4

Subtract from the amount found under steps 1 to 3 the amount (if
any) that is required to be distributed under paragraph 28
20
(distribution of remaining balance) in the year.
      (4)
If the amount found under step 4 in sub-paragraph (3) is a positive
amount, that is the remaining balance on the levy account for the
year.
Distribution of remaining balance
25
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
is 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-
30
paragraph (1), the amount referred to in that sub-paragraph may
not be distributed unless—
(a)
the 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
35
(b)
the report is approved by resolution of the House of
Commons.
      (3)
Before 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
40
nature of the basis of distribution.
      (4)
If such a report is approved by resolution of the House of
Commons, 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).
45
      (5)
The calculations must be made—

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Schedule 1 — Local retention of non-domestic rates
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(a)
as soon as is reasonably practicable after the report is
approved, and
(b)
in accordance with the basis of distribution specified in the
report.
      (6)
As soon as is reasonably practicable after making the calculations,
5
the Secretary of State must notify each relevant authority of—
(a)
whether 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
10
payment.
      (7)
If 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
15
under this paragraph must be made—
(a)
at 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
20
29
This Part is subject to Parts 9 (pooling of authorities) and 10
(designation of areas and classes of hereditament).
Part 8
Transitional protection payments
Regulations about deemed and actual rating income
25
30    (1)
The Secretary of State may by regulations make provision for
calculating 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—
30
(i)
regulations under section 57A (transitional relief
following 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
35
authority in England in respect of a year under sections 43
and 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
40
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.

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Schedule 1 — Local retention of non-domestic rates
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      (4)
In 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
5
means 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
10
year—
(a)
by 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
15
transitional protection payment in relation to an authority for a
year to be calculated by reference to its deemed and actual rating
income 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
20
liable to make a transitional protection payment to the
authority for the year of an amount equal to the excess;
(b)
if 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
25
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
rating 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—
30
(a)
about the making of calculations, and the supply of
information to the Secretary of State, by a billing authority
in connection with the determination of the transitional
protection payment (if any) to be made to or by the
authority;
35
(b)
about the assumptions and adjustments to be made, and
the information to be taken into account, in making such
calculations;
(c)
about the consequences of non-compliance with provision
under paragraph (a) or (b), including (in particular)—
40
(i)
for the making by the Secretary of State of
calculations, or of assumptions as to the
information that would otherwise have been
supplied by the authority;
(ii)
for the suspension of payments to the authority.
45
      (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;