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14 Information | |
A local authority shall supply the Secretary of State with such information | |
relating to any of the matters dealt with in this Chapter, and at such time, as he | |
may request. | |
Supplementary | 5 |
15 Guidance | |
In carrying out its functions under this Chapter, a local authority shall have | |
regard— | |
(a) to such guidance as the Secretary of State may issue, and | |
(b) to such other guidance as the Secretary of State may by regulations | 10 |
specify for the purposes of this provision. | |
16 “Capital expenditure” | |
(1) Subject to subsection (2), references in this Chapter to capital expenditure, in | |
relation to a local authority, are to expenditure of the authority which falls to | |
be capitalised in accordance with proper practices. | 15 |
(2) The Secretary of State may— | |
(a) by regulations provide that expenditure of local authorities shall be | |
treated for the purposes of this Chapter as being, or as not being, capital | |
expenditure; | |
(b) by direction provide that expenditure of a particular local authority | 20 |
shall be treated for the purposes of this Chapter as being, or as not | |
being, capital expenditure. | |
17 External funds | |
(1) For the purposes of this Chapter— | |
(a) borrowing of money by a local authority for the purposes of an external | 25 |
fund shall be treated as not being borrowing by the authority; | |
(b) the temporary use by a local authority of money forming part of an | |
external fund, if not for a purpose of the fund, shall be treated as | |
borrowing by the authority; | |
(c) entry into a credit arrangement by a local authority for the purposes of | 30 |
an external fund shall be treated as not being entry into a credit | |
arrangement by the authority; | |
(d) a disposal by a local authority of— | |
(i) an interest in an asset which, at the time of the disposal, is an | |
asset of an external fund, or | 35 |
(ii) an investment held for the purposes of such a fund, | |
shall be treated as not being a disposal by the authority; | |
(e) the making of an investment by a local authority for the purposes of an | |
external fund shall be treated as not being the making of an investment | |
by the authority; | 40 |
(f) expenditure incurred by a local authority in respect of payments out of | |
an external fund shall be treated as not being expenditure of the | |
authority. | |
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(2) In this section, references to an external fund, in relation to a local authority, | |
are to— | |
(a) a superannuation fund which the authority is required to keep by | |
virtue of the Superannuation Act 1972 (c. 11), or | |
(b) a trust fund of which the authority is a trustee. | 5 |
18 Local authority companies etc | |
(1) The Secretary of State may for the purposes of this Chapter by regulations | |
make provision for things done by or to a body mentioned in subsection (2) to | |
be treated in such cases and to such extent as the regulations may provide as | |
done by or to a local authority specified in, or determined in accordance with, | 10 |
the regulations. | |
(2) Those bodies are— | |
(a) a Passenger Transport Executive, | |
(b) a company which, in accordance with Part 5 of the Local Government | |
and Housing Act 1989 (c. 42) (companies in which local authorities | 15 |
have interests), is under the control, or for the time being subject to the | |
influence, of a local authority or a Passenger Transport Executive, and | |
(c) a trust to which the provisions of section 69 of that Act (companies | |
subject to local authority influence) are applicable because of an order | |
under section 72 of that Act (trusts influenced by local authorities). | 20 |
(3) A local authority to which regulations under this section apply and any body | |
or bodies falling within subsection (2)(a) or (b) with which the regulations link | |
the authority are referred to in this section as the members of a local authority | |
group. | |
(4) Regulations under this section may include— | 25 |
(a) provision for the application of any of the provisions of this Chapter to | |
members of a local authority group subject to such modifications as the | |
regulations may specify; | |
(b) provision as to the way in which— | |
(i) dealings between members of a local authority group, or | 30 |
(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 | |
(1) In sections 2(3) and (4), 6, 9 to 13, 15, 16, 17(1)(a), (b) and (d) to (f) and (2) and | 35 |
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. | |
(3) The appropriate person may by regulations— | 40 |
(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 | |
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(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 | 5 |
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 | 10 |
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. | 15 |
(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 | 20 |
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. | 25 |
(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 | 30 |
(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” | 35 |
(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 | 40 |
comply with proper practices; | |
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(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 (c. 42), | |
(b) any enactment passed after or in the same Session as that Act, and | 5 |
(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. | |
Chapter 3 | 10 |
General | |
23 “Local authority” | |
(1) The following are local authorities for the purposes of this Part— | |
(a) a county council; | |
(b) a county borough council; | 15 |
(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); | |
(f) a London borough council; | 20 |
(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; | |
(j) an authority established under section 10 of the Local Government Act | 25 |
1985 (c. 51) (waste disposal authorities); | |
(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 | 30 |
Planning Act 1990 (c. 8); | |
(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 | 35 |
regulations under subsection (2). | |
(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), | 40 |
(b) a body to which section 75 of that Act applies (bodies with power to | |
issue special levies), | |
(c) a body to which section 118 of that Act applies (other bodies with | |
levying powers), | |
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(d) a local precepting authority as defined in section 69 of the Local | |
Government Finance Act 1992 (c. 14). | |
(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. | 5 |
24 Wales | |
In its application to Wales, this Part, except section 19 and Schedule 1, has effect | |
as if for any reference to the Secretary of State there were substituted a | |
reference to the National Assembly for Wales. | |
Part 2 | 10 |
Financial administration | |
25 Budget calculations: report on robustness of estimates etc | |
(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 | 15 |
making calculations in accordance with that section, the chief finance officer of | |
the authority must report to it on the following matters— | |
(a) the robustness of the estimates made for the purposes of the | |
calculations, and | |
(b) the adequacy of the proposed financial reserves. | 20 |
(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 | |
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 | 25 |
affairs for the purposes of— | |
(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 | 30 |
(e) section 127(2) of the Greater London Authority Act 1999. | |
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 (calculation by | 35 |
billing authority of budget requirement for financial year), | |
(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 | 40 |
requirements for financial year). | |
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(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 | 5 |
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 | 10 |
(1) This section applies where an authority to which section 32 or 43 of the Local | |
Government Finance Act 1992 (c. 14) or section 85 of the Greater London | |
Authority Act 1999 (c. 29) 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 | 15 |
that a controlled reserve is or is likely to be inadequate, he must report to the | |
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 | 20 |
for the financial year under consideration. | |
(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 | 25 |
the financial year concerned is less than the minimum amount | |
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. | 30 |
(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 (billing or major precepting authority) | |
applies has made the calculations required by that section, it must review them | 35 |
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. | 40 |
(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. | |
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(4) For the purposes of subsection (3), there is a deterioration in an authority’s | |
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 | 5 |
calculations under review, or | |
(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 | 10 |
duty under subsection (1) applies. | |
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 | 15 |
each constituent body), each of the bodies in respect of which the calculations | |
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 | 20 |
the case of financial reserves to meet a revenue account deficit from an earlier | |
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— | 25 |
(a) take such action, if any, as it considers necessary to deal with the | |
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. | 30 |
(4) A report under subsection (3)(b) shall— | |
(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 | 35 |
position if on the review an amount falls to be calculated under section 85(6) of | |
the Greater London Authority Act 1999 (component budget requirement) | |
and— | |
(a) none fell to be calculated under that provision at the time of the | |
calculations under review, or | 40 |
(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. | |
(6) Where substitute calculations have effect, it is those calculations to which the | |
duty under subsection (1) applies. | 45 |
(7) In this section, “functional body” has the same meaning as in the Greater | |
London Authority Act 1999. | |
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