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Subtract from the amount found under steps 1 to 3 the aggregate
of the amounts of all the safety net payments calculated for the
previous year under paragraph 26(1).

5Step 5

Subtract from the amount found under steps 1 to 4 the aggregate
of all the payments to be made by the Secretary of State under
regulations under paragraph 28(4)(b) (adjustments following
safety net payment on account).

10Step 6

Add to the amount found under steps 1 to 5 the aggregate of all the
payments to be made to the Secretary of State under regulations
under paragraph 28(4)(b).

Step 7

(4) 15If the amount found under step 7 in sub-paragraph (3) is a positive
amount, that is the remaining balance on the levy account for the
year.

(5) Sub-paragraph (6) applies if, in the first year for which the levy
account is kept—

(a) 20an amount is credited to the levy account for the year in
accordance with paragraph 20(2), and

(b) that amount exceeds the aggregate of all the payments on
account to be made in the year under regulations under
paragraph 28.

(6) 25The amount of the excess is to be treated as the remaining balance
on the levy account for the year.

Distribution of remaining balance

30 (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 21(2)).

(2) The Secretary of State may by regulations make provision about
the basis (“the basis of distribution”) on which an amount referred
to in sub-paragraph (1) is to be distributed.

(3) 35If the Secretary of State makes a determination under sub-
paragraph (1), 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 that sub-paragraph.

(4) The calculations must be made—

(a) 40as soon as is reasonably practicable after the determination
is made, and

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

(5) As soon as is reasonably practicable after making the calculations,
45the Secretary of State must notify each relevant authority of—

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(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
5payment.

(6) 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.

(7) A payment from the Secretary of State to a relevant authority
10under 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;
but any such time must fall within the year to which the remaining
15balance relates.

Relationship with other provisions

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

Part 8 20Transitional protection payments

Regulations about deemed and actual rating income

32 (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
25authority in England in respect of a year under sections 43
and 45 if—

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

(ii) 30the 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
and 45 if the authority acted diligently.

(2) The regulations may include provision for adjustments to be made
35to 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) 40In 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

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

Regulations about transitional protection payments

33 (1) 5The Secretary of State may by regulations make provision for the
making of a payment (a “transitional protection payment”) for a
year—

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

(b) 10by 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
income for the year, so that—

(a) 15if 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) if its actual rating income for a year exceeds its deemed
20rating 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
rating income for the year, no transitional protection
25payment 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
in connection with the determination of the transitional
30protection 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
calculations;

(c) 35about 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
information that would otherwise have been
40supplied 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
45payment;

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

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(c) for the certification of calculations made, or information
supplied to the Secretary of State, by a billing authority in
connection with the determination of the final transitional
protection payment (if any) to be made to or by the
5authority;

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

(e) 10about 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) The regulations may confer power on the Secretary of State to give
15directions about the certification of calculations or information.

(6) The 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.

20Part 9 Pooling of authorities

Designation of pool of authorities

34 (1) The Secretary of State may, in accordance with this paragraph,
designate two or more relevant authorities as a pool of authorities
25for the purposes of the provisions of this Schedule applying to
such pools (as to which, see paragraphs 36 and 37).

(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) 30may revoke a designation (in particular if any condition of
the 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) 35for the year beginning after it is made, and

(b) for 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 12(2) (notification of general basis of
40calculation to be specified in local government finance report for
year), unless sub-paragraph (6) applies.

(6) A revocation made after the Secretary of State has given that
notification has effect for the year for which the notification was
given if—

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(a) it is made in response to a request under sub-paragraph
(3)(b) made within the period of 28 days beginning with
the date on which the notification was given, and

(b) it is made before the local government finance report for
5that year is laid before the House of Commons.

(7) After making or revoking a designation, the Secretary of State
must notify the authorities covered by the designation.

(8) A notification under sub-paragraph (7) must be given before or at
the same time as the Secretary of State gives the notification
10required by paragraph 12(2) for the year to which the designation
or revocation relates, unless sub-paragraph (9) applies.

(9) A notification under sub-paragraph (7) of a revocation made in the
circumstances described in sub-paragraph (6) must be given as
soon as is reasonably practicable after it is made.

15Designations subject to conditions

35 (1) A designation under paragraph 34 must be made subject to
conditions—

(a) requiring the authorities to which it relates to appoint a
lead authority to exercise the functions specified in the
20conditions, and

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

(2) A designation under paragraph 34 may be made subject to such
25other conditions as the Secretary of State thinks fit.

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

(a) adding a condition,

(b) modifying a condition, or

(c) removing a condition (other than one mentioned in sub-
30paragraph (1)).

(4) Before varying a designation under sub-paragraph (3), the
Secretary of State must consult the authorities covered by the
designation.

(5) After varying a designation under sub-paragraph (3), the
35Secretary of State must notify those authorities.

Effect of designation in relation to Part 5

36 (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.

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(2) Sub-paragraph (1) does not apply in relation to paragraph 15(5)
(duty to send copy of amending report to each relevant authority).

(3) This paragraph does not prevent—

(a) the local government finance report for the year, or an
5amending report under paragraph 15 in relation to that
report, from also making provision in relation to the
individual authorities in the pool,

(b) the Secretary of State from making calculations based on
the local government finance report, or any such
10amending report, in relation to each of those authorities, or

(c) the Secretary of State from notifying the results of the
calculations to each of those authorities.

(4) But paragraphs 14 and 17 (payments following reports) do not
apply in relation to such calculations.

15Effect of designation in relation to Part 7

37 (1) Regulations under paragraph 22, 25 or 28 (levy payments, safety
net payments and safety net payments on account) may provide
for a pool of authorities to be treated as a relevant authority for the
purposes of the regulations.

(2) 20Such regulations may, in particular, make provision—

(a) that is similar to provision which may be made under the
paragraph in question apart from sub-paragraph (1)
above, or

(b) that applies such provision with modifications.

(3) 25Where regulations under paragraph 22 apply to a pool of
authorities for a year, paragraphs 23 and 24 (calculation and
making of levy payments) apply in relation to the authorities and
the year as if references in them to a relevant authority were to the
pool.

(4) 30Where regulations under paragraph 25 apply to a pool of
authorities for a year, paragraphs 26 and 27 (calculation and
making of safety net payments) apply in relation to the authorities
and the year as if references in them to a relevant authority were
to the pool.

(5) 35Where a designation of a pool of authorities has effect for a year,
paragraph 30 (distribution of remaining balance) applies in
relation to the pool as if—

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

(b) 40the pool were itself a relevant authority.

(6) Regulations under paragraph 30 may provide for a pool of
authorities to be treated as a relevant authority for the purposes of
the regulations.

(7) This paragraph does not prevent—

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(a) regulations under paragraph 22, 25, 28 or 30 from also
making provision in relation to the individual authorities
in a pool,

(b) the Secretary of State from making calculations under
5paragraph 23, 26 or 30(3) based on such regulations in
relation to each of those authorities, or

(c) the Secretary of State from notifying the results of the
calculations to each of those authorities.

(8) But paragraphs 24, 27 and 30(6) (payments following calculations)
10do not apply in relation to such calculations.

Further provisions about effect of designation

38 (1) A requirement under Part 5 or 7 of this Schedule in its application
by virtue of paragraph 36 or 37 to notify a pool of authorities of
any matter is a requirement to notify each authority in the pool of
15that matter.

(2) Where by virtue of either of those paragraphs a pool of authorities
is required to make a payment to the Secretary of State, each
authority in the pool is jointly and severally liable to make that
payment.

(3) 20Where by virtue of either of those paragraphs the Secretary of
State is required to make a payment to a pool of authorities, the
payment is to be made to the lead authority appointed in
accordance with conditions under paragraph 35(1).

Part 10 25Designation of areas and classes of hereditament

Designation of areas

39 (1) The Secretary of State may by regulations—

(a) designate one or more areas in England (a “designated
area”);

(b) 30provide for the calculation in accordance with the
regulations, for each year for which the designation has
effect and in relation to each billing authority all or part of
whose area falls within a designated area, of the amount
mentioned in sub-paragraph (2);

(c) 35provide for the calculation of a proportion of that amount
in accordance with the regulations;

(d) provide for that amount or that proportion to be
disregarded for the purposes of calculations under any of
the following provisions in its application to the authority
40for that year—

(i) paragraph 6 (payments in respect of the central
share);

(ii) regulations under paragraph 7 (administrative
arrangements for payments in respect of the central
45share);

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(iii) regulations under paragraph 9 (payments by
billing authorities to major precepting authorities);

(iv) regulations under paragraph 10 (administrative
arrangements for payments by billing authorities
5to major precepting authorities);

(v) paragraph 13 (calculations following local
government finance report);

(vi) paragraph 16 (calculations following amending
report);

(vii) 10paragraph 23 (calculations of levy payments);

(viii) paragraph 26 (calculations of safety net payments);

(ix) regulations under paragraph 28 (calculations of
payments on account);

(x) paragraph 30 (calculations relating to distribution
15of remaining balance).

(2) Subject as follows, the amount referred to in sub-paragraph (1)(b)
is the total amount which, if the authority acted diligently, would
be payable to it for the year under sections 43 and 45 in respect of
the hereditaments within the designated area.

(3) 20The regulations may provide for that amount, or any proportion
calculated under sub-paragraph (1)(c), to be adjusted in
accordance with the regulations (and references in this paragraph
to that amount or proportion include the amount or proportion as
adjusted in accordance with such provision).

(4) 25The regulations may, in particular, provide for adjustments to that
amount or that proportion by reference to changes affecting a
calculation under regulations under this paragraph for an earlier
year but not taken into account in that calculation.

(5) The regulations must—

(a) 30specify the date on which the designation takes effect,
which must be the first day of a year, or

(b) provide that the designation is to take effect on the first day
of the first year after specified conditions have been met.

(6) Conditions under sub-paragraph (5)(b) may require compliance
35with specifications or requirements contained in a document of a
specified kind.

(7) If the regulations make provision under sub-paragraph (5)(b),
they must provide that they will cease to have effect at the end of
a specified period unless the conditions are met by the end of that
40period.

(8) The regulations may specify the years for which the designation
has effect.

(9) If the regulations contain provision under sub-paragraph (8)

(a) amendments within sub-paragraph (10) may not be made
45to the regulations unless (in the case of amendments
within paragraph (a), (b) or (c) of that sub-paragraph) the
amendments are expressed to come into force after the end
of that period, and

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(b) the regulations may not be revoked unless the revocation
is expressed to come into force after the end of that period.

(10) The amendments mentioned in sub-paragraph (9)(a) are those
which have the effect of—

(a) 5altering the boundaries of a designated area,

(b) where provision made under paragraph (d) of sub-
paragraph (1) has the effect that the amount referred to in
that paragraph is to be disregarded, providing for a
proportion of that amount to be disregarded,

(c) 10where provision made under that paragraph has the effect
that a proportion is to be disregarded, reducing that
proportion, or

(d) reducing the period for which the designation has effect.

(11) Regulations under this paragraph must specify each area
15designated by the regulations by means of a plan or map (whether
or not each area is specified by any other means).

(12) An area may be designated by regulations under this paragraph
by reference to such factors as the Secretary of State thinks fit.

(13) The consent of the Treasury is required to regulations under this
20paragraph.

(14) In this paragraph “specified” means specified in the regulations.

Designation of classes of hereditament

40 (1) The Secretary of State may by regulations—

(a) designate one or more classes of hereditaments in England
25(a “designated class”);

(b) provide for the calculation in accordance with the
regulations, for each year for which the designation has
effect and in relation to each billing authority whose area
includes hereditaments within the designated class, of the
30amount mentioned in sub-paragraph (2);

(c) provide for the calculation of a proportion of that amount
in accordance with the regulations;

(d) provide for that amount or that proportion to be
disregarded for the purposes of calculations under any of
35the following provisions in its application to the authority
for that year—

(i) paragraph 6 (payments in respect of the central
share);

(ii) regulations under paragraph 7 (administrative
40arrangements for payments in respect of the central
share);

(iii) regulations under paragraph 9 (payments by
billing authorities to major precepting authorities);

(iv) regulations under paragraph 10 (administrative
45arrangements for payments by billing authorities
to major precepting authorities);

(v) paragraph 13 (calculations following local
government finance report);

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(vi) paragraph 16 (calculations following amending
report);

(vii) paragraph 23 (calculations of levy payments);

(viii) paragraph 26 (calculations of safety net payments);

(ix) 5regulations under paragraph 28 (calculations of
payments on account);

(x) paragraph 30 (calculations relating to distribution
of remaining balance).

(2) Subject as follows, the amount referred to in sub-paragraph (1)(b)
10is the total amount which, if the authority acted diligently, would
be payable to it for the year under sections 43 and 45 in respect of
the hereditaments within the designated class.

(3) The regulations may provide for that amount, or any proportion
calculated under sub-paragraph (1)(c), to be adjusted in
15accordance with the regulations (and references in this paragraph
to that amount or proportion include the amount or proportion as
adjusted in accordance with such provision).

(4) The regulations may, in particular, provide for adjustments to that
amount or that proportion by reference to changes affecting a
20calculation under regulations under this paragraph for an earlier
year but not taken into account in that calculation.

(5) The regulations may include provision imposing duties or
conferring powers on valuation officers (whether as regards
determinations, certificates or otherwise) for the purpose of the
25calculation referred to in sub-paragraph (1)(c).

(6) The regulations—

(a) must specify the date on which the designation takes effect
(which must be at the beginning of a year), and

(b) may specify the years for which the designation has effect.

(7) 30A class may be designated by regulations under this paragraph by
reference to such factors as the Secretary of State thinks fit.

(8) Before making regulations under this paragraph the Secretary of
State must consult such persons as the Secretary of State thinks fit.

(9) The fact that this paragraph was not in force when consultation in
35relation to proposed regulations under it took place is to be
disregarded in determining whether there has been compliance
with sub-paragraph (8).

(10) The consent of the Treasury is required to regulations under this
paragraph.

40Payments to relevant authorities

41 (1) Regulations under paragraph 39 or 40 may make provision for a
billing authority to make a payment for a year to a relevant
authority of an amount equal to the whole or part of the amount
or proportion that, in relation to the billing authority and the year,
45is to be disregarded for the purposes of the calculations mentioned
in paragraph 39(1)(d) or 40(1)(d) (as the case may be).

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