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(i) dealings between members of a local authority group, or | |
(ii) changes in the capitalisation or capital structure of a company | |
in a local authority group, | |
are to be brought into account for the purposes of this Chapter. | |
19 Application to parish and community councils | 5 |
(1) In sections 2(3) and (4), 6, 9 to 13, 15, 16, 17(1)(a), (b) and (d) to (f) and (2) and | |
18, references to a local authority include a parish council, a community | |
council and charter trustees. | |
(2) Schedule 1 (which makes provision about capital finance in relation to parish | |
and community councils and charter trustees) has effect. | 10 |
(3) The appropriate person may by regulations— | |
(a) apply any of the other provisions of this Chapter to parish or | |
community councils or charter trustees, or parish or community | |
councils or charter trustees of any description, with or without | |
modifications, and | 15 |
(b) make any corresponding disapplication of any of the provisions of | |
Schedule 1. | |
20 Directions | |
(1) Directions under this Chapter shall be in writing. | |
(2) Directions under this Chapter may be expressed to have effect in specified | 20 |
circumstances or subject to specified conditions. | |
(3) Any power to give a direction under this Chapter includes power to give a | |
direction varying or revoking a previous direction given in exercise of the | |
power. | |
Chapter 2 | 25 |
Accounts | |
21 Accounting practices | |
(1) The Secretary of State may by regulations make provision about the accounting | |
practices to be followed by a local authority, in particular with respect to the | |
charging of expenditure to a revenue account. | 30 |
(2) In any enactment to which this subsection applies, reference to proper | |
practices, in relation to accounts of a local authority, is to those accounting | |
practices— | |
(a) which the authority is required to follow by virtue of any enactment, or | |
(b) which are contained in a code of practice or other document which is | 35 |
identified for the purposes of this provision by regulations made by the | |
Secretary of State. | |
(3) In the event of conflict between practices falling within paragraph (a) of | |
subsection (2) and practices falling within paragraph (b) of that subsection, | |
only those falling within paragraph (a) are to be regarded as proper practices. | 40 |
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(4) Subsections (2) and (3) apply to any enactment contained in— | |
(a) this Act, | |
(b) any Act passed after or in the same Session as this Act, | |
(c) the Local Government and Housing Act 1989 (c. 42), | |
(d) the Audit Commission Act 1998 (c. 18), and | 5 |
(e) subordinate legislation (within the meaning of the Interpretation Act | |
1978 (c. 30)) whenever made. | |
(5) In this section, “local authority” includes a parish council, a community council | |
and charter trustees. | |
22 “Revenue account” | 10 |
(1) References to a revenue account, in relation to a local authority, are to one of | |
the following accounts for a financial year of the authority— | |
(a) a revenue account which the authority is required to keep by virtue of | |
any enactment; | |
(b) a revenue account which the authority is required to keep in order to | 15 |
comply with proper practices; | |
(c) any other revenue account which the authority decides to keep in | |
accordance with proper practices. | |
(2) This section has effect for the purposes of— | |
(a) the Local Government and Housing Act 1989, | 20 |
(b) any enactment passed after or in the same Session as that Act, and | |
(c) any earlier enactment amended by that Act or an enactment falling | |
within paragraph (b). | |
(3) In this section, “local authority” includes a parish council, a community council | |
and charter trustees. | 25 |
Chapter 3 | |
General | |
23 “Local authority” | |
(1) The following are local authorities for the purposes of this Part— | |
(a) a county council; | 30 |
(b) a county borough council; | |
(c) a district council; | |
(d) the Greater London Authority; | |
(e) a functional body, within the meaning of the Greater London Authority | |
Act 1999 (c. 29); | 35 |
(f) a London borough council; | |
(g) the Common Council of the City of London, in its capacity as a local | |
authority, police authority or port health authority; | |
(h) the Council of the Isles of Scilly; | |
(i) the Greater London Magistrates’ Courts Authority; | 40 |
(j) an authority established under section 10 of the Local Government Act | |
1985 (c. 51) (waste disposal authorities); | |
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(k) a joint authority established by Part 4 of that Act (fire services, civil | |
defence and transport); | |
(l) a joint planning board constituted for an area in Wales outside a | |
National Park by an order under section 2(1B) of the Town and Country | |
Planning Act 1990 (c. 8); | 5 |
(m) a fire authority constituted by a combination scheme; | |
(n) a police authority established under section 3 of the Police Act 1996 | |
(c. 16); | |
(o) any other body specified for the purposes of this subsection by | |
regulations under subsection (2). | 10 |
(2) The Secretary of State may by regulations specify for the purposes of | |
subsection (1) any body which is (or any class of bodies each of which is)— | |
(a) a levying body, within the meaning of section 74 of the Local | |
Government Finance Act 1988 (c. 41), | |
(b) a body to which section 75 of that Act applies (bodies with power to | 15 |
issue special levies), | |
(c) a body to which section 118 of that Act applies (other bodies with | |
levying powers), | |
(d) a local precepting authority as defined in section 69 of the Local | |
Government Finance Act 1992 (c. 14). | 20 |
(3) Regulations under subsection (2) may provide for this Part to have effect, in | |
relation to a body specified under that subsection, subject to exceptions or | |
modifications. | |
24 Wales | |
In its application to Wales, this Part, except section 19 and Schedule 1, has effect | 25 |
as if for any reference to the Secretary of State there were substituted a | |
reference to the National Assembly for Wales. | |
Part 2 | |
Financial administration | |
25 Budget calculations: report on robustness of estimates etc | 30 |
(1) Where an authority to which section 32 or 43 of the Local Government Finance | |
Act 1992 (billing or major precepting authority) or section 85 of the Greater | |
London Authority Act 1999 (c. 29) (Greater London Authority) applies is | |
making calculations in accordance with that section, the chief finance officer of | |
the authority must report to it on the following matters— | 35 |
(a) the robustness of the estimates made for the purposes of the | |
calculations, and | |
(b) the adequacy of the proposed financial reserves. | |
(2) An authority to which a report under this section is made shall have regard to | |
the report when making decisions about the calculations in connection with | 40 |
which it is made. | |
(3) In this section, “chief finance officer”, in relation to an authority, means the | |
officer having responsibility for the administration of the authority’s financial | |
affairs for the purposes of— | |
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(a) section 151 of the Local Government Act 1972 (c. 70), | |
(b) section 73 of the Local Government Act 1985 (c. 51), | |
(c) section 112 of the Local Government Finance Act 1988 (c. 41), | |
(d) section 6 of the Local Government and Housing Act 1989 (c. 42), or | |
(e) section 127(2) of the Greater London Authority Act 1999 (c. 29). | 5 |
26 Minimum reserves | |
(1) This section has effect in relation to the estimation of financial reserves for the | |
purpose of calculations in accordance with— | |
(a) section 32 of the Local Government Finance Act 1992 (c. 14) (calculation | |
by billing authority of budget requirement for financial year), | 10 |
(b) section 43 of that Act (corresponding provision for major precepting | |
authority), or | |
(c) section 85 of the Greater London Authority Act 1999 (calculation by | |
Greater London Authority of component and consolidated budget | |
requirements for financial year). | 15 |
(2) In the case of a controlled reserve, it shall not be regarded as appropriate for | |
the balance of the reserve at the end of the financial year under consideration | |
to be less than the minimum amount determined in accordance with | |
regulations made by the appropriate person. | |
(3) In subsection (2), “controlled reserve” means a financial reserve of a | 20 |
description specified for the purposes of this section by regulations made by | |
the appropriate person. | |
(4) Different provision may be made under subsection (2) for different | |
descriptions of financial reserve. | |
27 Budget calculations: report on inadequacy of controlled reserve | 25 |
(1) This section applies where an authority to which section 32 or 43 of the Local | |
Government Finance Act 1992 or section 85 of the Greater London Authority | |
Act 1999 applies is making calculations in accordance with that section. | |
(2) If in relation to the previous financial year it appears to the chief finance officer | |
that a controlled reserve is or is likely to be inadequate, he must report to the | 30 |
authority on— | |
(a) the reasons for that situation, and | |
(b) the action, if any, which he considers it would be appropriate to take to | |
prevent such a stuation arising in relation to the corresponding reserve | |
for the financial year under consideration. | 35 |
(3) For the purposes of subsection (2)— | |
(a) a controlled reserve is a financial reserve of a description specified by | |
regulations under section 26(3), and | |
(b) such a reserve is inadequate if the balance of the reserve at the end of | |
the financial year concerned is less than the minimum amount | 40 |
determined in accordance with regulations under section 26(2). | |
(4) An authority to which a report under this section is made shall have regard to | |
the report when making decisions about the calculations in connection with | |
which it is made. | |
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(5) In this section, “chief finance officer” has the same meaning as in section 25. | |
28 Budget monitoring: general | |
(1) Where in relation to a financial year an authority to which section 32 or 43 of | |
the Local Government Finance Act 1992 (c. 14) (billing or major precepting | |
authority) applies has made the calculations required by that section, it must | 5 |
review them from time to time during the year. | |
(2) In carrying out a review under subsection (1), an authority must use the same | |
figures for financial reserves as those used in the calculations under review, | |
except in the case of financial reserves to meet a revenue account deficit from | |
an earlier financial year. | 10 |
(3) If as a result of carrying out a review under subsection (1) it appears to the | |
authority that carried out the review that there has been a deterioration in its | |
financial position, it must take such action, if any, as it considers necessary to | |
deal with the situation. | |
(4) For the purposes of subsection (3), there is a deterioration in an authority’s | 15 |
financial position if on the review an amount falls to be calculated under | |
section 32(4) or 43(4) of the Local Government Finance Act 1992 (c. 14) (budget | |
requirement) and— | |
(a) none fell to be calculated under that provision at the time of the | |
calculations under review, or | 20 |
(b) an amount did then fall to be calculated under that provision and the | |
amount then calculated is less than the amount calculated on the | |
review. | |
(5) Where substitute calculations have effect, it is those calculations to which the | |
duty under subsection (1) applies. | 25 |
29 Budget monitoring: Greater London Authority | |
(1) Where in relation to a financial year the Greater London Authority has made | |
the calculations required by section 85(3) to (7) of the Greater London | |
Authority Act 1999 (c. 29) (calculation of component budget requirement for | |
each constituent body), each of the bodies in respect of which the calculations | 30 |
have been made must from time to time during the year review the calculations | |
relating to it. | |
(2) In carrying out a review under subsection (1), a body must use the same figures | |
for financial reserves as those used in the calculations under review, except in | |
the case of financial reserves to meet a revenue account deficit from an earlier | 35 |
financial year. | |
(3) If as a result of carrying out a review under subsection (1) it appears to the body | |
that carried out the review that there has been a deterioration in its financial | |
position, it must— | |
(a) take such action, if any, as it considers necessary to deal with the | 40 |
situation, and | |
(b) if it is a functional body, report the deterioration to— | |
(i) the Mayor of London, and | |
(ii) the Chair of the London Assembly. | |
(4) A report under subsection (3)(b) shall— | 45 |
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(a) include a statement of the reasons for the deterioration, and | |
(b) set out what action, if any, the body making the report proposes to take | |
to deal with the situation. | |
(5) For the purposes of subsection (3), there is a deterioration in a body’s financial | |
position if on the review an amount falls to be calculated under section 85(6) of | 5 |
the Greater London Authority Act 1999 (c. 29) (component budget | |
requirement) and— | |
(a) none fell to be calculated under that provision at the time of the | |
calculations under review, or | |
(b) an amount did then fall to be calculated under that provision and the | 10 |
amount then calculated is less than the amount calculated on the | |
review. | |
(6) Where substitute calculations have effect, it is those calculations to which the | |
duty under subsection (1) applies. | |
(7) In this section, “functional body” has the same meaning as in the Greater | 15 |
London Authority Act 1999. | |
30 Authorisation of agreements during the prohibition period | |
(1) In section 115 of the Local Government Finance Act 1988 (c. 41) (which sets out | |
the consequences for a relevant authority of the receipt of a report made by its | |
chief finance officer under section 114(3)), in subsection (6) (which prevents an | 20 |
authority that has received such a report from entering into certain agreements | |
during the prohibition period), at the end there is inserted “unless the chief | |
finance officer of the authority authorises it to do so”. | |
(2) After that subsection there is inserted— | |
“(6A) The chief finance officer may only give authority for the purposes of | 25 |
subsection (6) above if he considers that the agreement concerned is | |
likely to— | |
(a) prevent the situation that led him to make the report from | |
getting worse, | |
(b) improve the situation, or | 30 |
(c) prevent the situation from recurring. | |
(6B) Authority for the purposes of subsection (6) above shall— | |
(a) be in writing, | |
(b) identify the ground on which it is given, and | |
(c) explain the chief finance officer’s reasons for thinking that the | 35 |
ground applies.” | |
(3) In subsection (14) of that section (which defines certain terms used in that | |
section), after the definition of “the Assembly”, there is inserted— | |
““chief finance officer” has the same meaning as in section 114;”. | |
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Part 3 | |
Grants etc | |
Chapter 1 | |
Expenditure grant | |
31 Power to pay grant | 5 |
(1) A Minister of the Crown may pay a grant to a local authority towards expenditure | |
incurred or to be incurred by it. | |
(2) The amount of a grant under this section and the manner of its payment are to | |
be such as the Minister of the Crown concerned may determine. | |
(3) A grant under this section may be paid on such conditions as the Minister of | 10 |
the Crown concerned may determine. | |
(4) Conditions under subsection (3) may, in particular, include— | |
(a) provision as to the use of the grant; | |
(b) provision as to circumstances in which the whole or part of the grant | |
must be repaid. | 15 |
(5) In the case of a grant to a local authority in England, the powers under this | |
section are exercisable with the consent of the Treasury. | |
32 Ancillary powers | |
(1) A local authority must supply a Minister of the Crown with such information | |
as he may require for the purposes of section 31. | 20 |
(2) A Minister of the Crown may in connection with that section require a local | |
authority to formulate policies in relation to any matter. | |
(3) In this section, “local authority” includes a functional body. | |
33 Application to Greater London Authority | |
(1) For the purposes of section 31, expenditure of a functional body shall be treated | 25 |
as expenditure of the Greater London Authority. | |
(2) The conditions on which grant under section 31 may be paid include, in the | |
case of a grant to the Greater London Authority, a condition requiring the | |
Mayor to transfer the grant to a functional body. | |
(3) A decision to pay a grant under section 31 subject to such a condition as is | 30 |
mentioned in subsection (2) above shall be notified to to the functional body | |
concerned as well as to the Greater London Authority. | |
(4) Where a grant paid under section 31 to the Greater London Authority is paid | |
subject to such a condition as is mentioned in subsection (2) above, the Mayor | |
must transfer the grant to the functional body concerned forthwith. | 35 |
(5) Where a grant paid under section 31 to the Greater London Authority is not | |
paid subject to such a condition as is mentioned in subsection (2) above, the | |
Mayor may transfer the grant to a functional body. | |
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