Localism Bill

House of Commons

Session 2010 - 11
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Localism Bill

Localism Bill
Part 4 — Community empowerment
Chapter 2 — Council tax
40

authorities have power to issue precepts to it, is notified by it to
those authorities (“the major precepting authorities concerned”)
within the prescribed period.
(2)
Where the aggregate calculated (or last calculated) by the authority for
the year under subsection (2) of section 31A above does not exceed that
5
so calculated under subsection (3) of that section, the amount for item
R in subsection (1) above is to be nil.
(3)
The Secretary of State must make regulations containing rules for
making for any year the calculation required by item T in subsection (1)
above; and a billing authority must make the calculation for any year in
10
accordance with the rules for the time being effective (as regards the
year) under the regulations.
(4)
Regulations prescribing a period for the purposes of item T in
subsection (1) above may provide that, in any case where a billing
authority fails to notify its calculation to the major precepting
15
authorities concerned within that period, that item must be determined
in the prescribed manner by such authority or authorities as may be
prescribed.
(5)
The Secretary of State may by regulations do either or both of the
following—
20
(a)
alter the constituents of any calculation to be made under
subsection (1) above (whether by adding, deleting or amending
items);
(b)
provide for rules governing the making of any calculation
under that subsection (whether by adding provisions to, or
25
deleting or amending provisions of, this section, or by a
combination of those methods).”
60
Council tax calculations by major precepting authorities in England
Before section 43 of the Local Government Finance Act 1992 insert—
“42A
Calculation of council tax requirement by authorities in England
30
(1)
In relation to each financial year a major precepting authority in
England must make the calculations required by this section.
(2)
The authority must calculate the aggregate of—
(a)
the expenditure the authority estimates it will incur in the year
in performing its functions and will charge to a revenue account
35
for the year in accordance with proper practices,
(b)
such allowance as the authority estimates will be appropriate
for contingencies in relation to amounts to be charged or
credited to a revenue account for a year in accordance with
proper practices,
40
(c)
the financial reserves which the authority estimates it will be
appropriate to raise in the year for meeting its estimated future
expenditure, and
(d)
such financial reserves as are sufficient to meet so much of the
amount estimated by the authority to be a revenue account
45
deficit for any earlier financial year as has not already been
provided for.

Localism Bill
Part 4 — Community empowerment
Chapter 2 — Council tax
41

(3)
The authority must calculate the aggregate of—
(a)
the income which it estimates will accrue to it in the year and
which it will credit to a revenue account for the year in
accordance with proper practices, other than income which it
estimates will accrue to it in respect of any precept issued by it,
5
and
(b)
the amount of the financial reserves which the authority
estimates that it will use in order to provide for the items
mentioned in paragraphs (a) and (b) of subsection (2) above.
(4)
If the aggregate calculated under subsection (2) above exceeds that
10
calculated under subsection (3) above, the authority must calculate the
amount equal to the difference; and the amount so calculated is to be its
council tax requirement for the year.
(5)
In making the calculation under subsection (2) above the authority
must ignore payments which must be met from a trust fund.
15
(6)
In estimating under subsection (2)(a) above an authority must take into
account—
(a)
the amount of any expenditure which it estimates it will incur
in the year in making any repayments of grants or other sums
paid to it by the Secretary of State, and
20
(b)
in the case of authority which is a county council, the amount of
any levy issued to it for the year.
(7)
But (except as provided by regulations under section 74 of the 1988 Act)
the authority must not anticipate a levy not issued.
(8)
For the purposes of subsection (2)(c) above an authority’s estimated
25
future expenditure is—
(a)
that which the authority estimates it will incur in the financial
year following the year in question, will charge to a revenue
account for the year in accordance with proper practices and
will have to defray in the year before the following sums are
30
sufficiently available—
(i)
sums which will be payable to it for the year, and
(ii)
sums in respect of which amounts will be credited to a
revenue account for the year in accordance with proper
practices, and
35
(b)
that which the authority estimates it will incur in the financial
year referred to in paragraph (a) above or any subsequent
financial year in performing its functions and which will be
charged to a revenue account for that or any other year in
accordance with proper practices.
40
(9)
In making the calculation under subsection (3) above the authority
must ignore payments which must be made into a trust fund.
(10)
In estimating under subsection (3)(a) the authority must take into
account the sums which the authority estimates will be paid to it in the
year by billing authorities in accordance with regulations under section
45
99(3) of the 1988 Act.
(11)
The Secretary of State may by regulations do one or both of the
following—

Localism Bill
Part 4 — Community empowerment
Chapter 2 — Council tax
42

(a)
alter the constituents of any calculation to be made under
subsection (2) or (3) above (whether by adding, deleting or
amending items);
(b)
alter the rules governing the making of any calculation under
subsection (2) or (3) above (whether by deleting or amending
5
subsections (5) to (10) above, or any of them, or by adding other
provisions, or by a combination of those methods).
(12)
This section is subject to section 52ZT below (which requires a direction
to a major precepting authority that the referendum provisions in
Chapter 4ZA are not to apply to the authority for a financial year to
10
state the amount of the authority’s council tax requirement for the
year).
42B
Calculation of basic amount of tax by authorities in England
(1)
In relation to each financial year a major precepting authority in
England must calculate the basic amount of its council tax by applying
15
the formula—

where—
R is the amount calculated (or last calculated) by the authority
under section 42A(4) above as its council tax requirement for
the year;
20
T is the aggregate of the amounts which are calculated by the
billing authorities to which the authority issues precepts (“the
billing authorities concerned”) as their council tax bases for the
year for their areas, or (as the case may require) for the parts of
their areas falling within the authority’s area, and are notified
25
by them to the authority within the prescribed period.
(2)
Where the aggregate calculated (or last calculated) by the authority for
the year under subsection (2) of section 42A above does not exceed that
so calculated under subsection (3) of that section, the amount for item
R in subsection (1) above is to be nil.
30
(3)
The Secretary of State must make regulations containing rules for
making for any year the calculation required by item T in subsection (1)
above; and the billing authorities concerned must make the calculations
for any year in accordance with the rules for the time being effective (as
regards the year) under the regulations.
35
(4)
Regulations prescribing a period for the purposes of item T in
subsection (1) above may provide that, in any case where a billing
authority fails to notify its calculation to the precepting authority
concerned within that period, that item must be determined in the
prescribed manner by such authority or authorities as may be
40
prescribed.
(5)
The Secretary of State may by regulations do either or both of the
following—

Localism Bill
Part 4 — Community empowerment
Chapter 2 — Council tax
43

(a)
alter the constituents of any calculation to be made under
subsection (1) above (whether by adding, deleting or amending
items);
(b)
provide for rules governing the making of any calculation
under that subsection (whether by adding provisions to, or
5
deleting or amending provisions of, this section, or by a
combination of those methods).”
61
Calculation of council tax requirement by the Greater London Authority
(1)
Section 85 of the Greater London Authority Act 1999 (calculation of component
and consolidated budget requirements) is amended as follows.
10
(2)
In the section heading for “budget” substitute “council tax”.
(3)
In subsection (1) for “43” substitute “42A”.
(4)
In subsection (4)—
(a)
in paragraph (a) for the words from “, other than” to “the 1988 Act”
substitute “in accordance with proper practices”, and
15
(b)
in paragraph (b)—
(i)
for “expenditure to be charged” substitute “amounts to be
charged or credited”, and
(ii)
after “for the year” insert “in accordance with proper practices”.
(5)
In subsection (5) for paragraph (a) substitute—
20
“(a)
the income which the Authority estimates will accrue to or for
the body in the year and which will be credited to a revenue
account for the year in accordance with proper practices, other
than income which the Authority estimates will accrue in
respect of any precept issued by it;”.
25
(6)
In subsection (6)( b) for “budget” substitute “council tax”.
(7)
In subsection (7) for “budget” substitute “council tax”.
(8)
In subsection (8) for “budget” in both places substitute “council tax”.
(9)
Omit subsection (9).
(10)
Section 86 of that Act (provisions supplemental to section 85) is amended as
30
follows.
(11)
After subsection (1) insert—
“(1A)
In making any calculation under subsection (4) of section 85 above the
Authority shall ignore payments which must be met from a trust fund.
(1B)
In estimating under subsection (4)(a) of section 85 above—
35
(a)
in the case of any functional body, the Authority shall take into
account the amount of any expenditure which it estimates will
be incurred in the year in respect of the body under section 43(1)
of the Local Government Act 2003 or in paying any BID levy for
which the body is liable, and
40
(b)
in the case of the Mayor, the Authority shall take into account
the amount of any expenditure which it estimates will be
incurred in the year in respect of the Authority under section

Localism Bill
Part 4 — Community empowerment
Chapter 2 — Council tax
44

43(1) of the Local Government Act 2003 or in paying any BID
levy for which the Authority is liable.”
(12)
After subsection (2A) insert—
“(2B)
In estimating under subsection (4)(a) of section 85 above in the case of
the Mayor, the Authority shall take into account the amount of any
5
expenditure which the Authority estimates it will incur in the year in
pursuance of regulations under section 99(3) of the Local Government
Finance Act 1988.”
(13)
After subsection (4) insert—
“(4A)
In making any calculation under subsection (5) of section 85 above, the
10
Authority must ignore payments which must be made into a trust fund.
(4B)
In estimating under subsection (5)(a) of section 85 above in the case of
the Mayor, the Authority shall take into account—
(a)
the amounts which the Authority estimates will be paid to it in
the year by billing authorities in accordance with regulations
15
under section 99(3) of the Local Government Finance Act 1988,
and
(b)
the amount of any expenditure which it estimates will be
incurred in the year by the Authority in making any
repayments of grants or other sums paid to the Authority by the
20
Secretary of State.
(4C)
In estimating under subsection (5)(a) of section 85 above in the case of
a functional body, the Authority shall take into account the amount of
any expenditure which it estimates will be incurred in the year in
making by or in respect of the body any repayments of grants or other
25
sums paid to or for the body by the Secretary of State.
(4D)
In estimating under subsection (5)(a) of section 85 above in the case of
the Mayor’s Office for Policing and Crime, the Authority must use such
amounts as may be prescribed by the Secretary of State as the sums that
are payable to the Mayor’s Office for Policing and Crime in respect of
30
the following items—
(a)
redistributed non-domestic rates,
(b)
revenue support grant,
(c)
general GLA grant, and
(d)
additional grant.
35
(4E)
In subsection (4D) above, “prescribed” means specified in, or
determined in accordance with, either—
(a)
the appropriate report or determination, or
(b)
regulations made by the Secretary of State,

as the Secretary of State may determine in the case of any particular
40
item and any particular financial year or years.
(4F)
In subsection (4E) above, “the appropriate report or determination”
means—
(a)
in the case of an item specified in paragraph (a) or (b) of
subsection (4D), the local government finance report for the
45
financial year in question,

Localism Bill
Part 4 — Community empowerment
Chapter 2 — Council tax
45

(b)
in the case of the item specified in paragraph (c) of that
subsection, the determination under section 100 below for the
financial year in question, and
(c)
in the case of the item specified in paragraph (d) of that
subsection, the report under section 85 of the Local Government
5
Finance Act 1988 relating to that item.”
(14)
In subsection (5)(b) for “(4)” substitute “(4F)”.
(15)
Omit subsection (6).
62
Calculation of basic amount of tax by the Greater London Authority
(1)
Section 88 of the Greater London Authority Act 1999 (calculation of basic
10
amount of tax) is amended as follows.
(2)
In subsection (1) for “44” substitute “42B”.
(3)
For subsection (2) substitute—
“(2)
In relation to each financial year the Authority shall calculate the basic
amount of its council tax by applying the formula—
15

where—
R is the amount calculated (or last calculated) by the Authority
under section 85(8) above as its consolidated council tax
requirement for the year;
A is the amount of the special item;
20
T is the aggregate of the amounts which are calculated by the
billing authorities to which the Authority issues precepts (“the
billing authorities concerned”) as their council tax bases for the
year for their areas and are notified by them to the Authority
within the prescribed period.”
25
(4)
Omit subsections (3) to (5).
(5)
In subsection (8) for paragraph (b) substitute—
“(b)
provide for rules governing the making of any calculation
under that subsection (whether by adding provisions to, or
deleting or amending provisions of, this section, or by a
30
combination of those methods).”
(6)
Section 89 of that Act (additional calculations: special item for part of Greater
London) is amended as follows.

Localism Bill
Part 4 — Community empowerment
Chapter 2 — Council tax
46

(7)
For subsection (4) substitute—
“(4)
For dwellings in any part of Greater London to which the special item
relates, the amount in respect of the special item is given by the
formula—

where—
5
S2 is the amount of the special item;
TP2 is the aggregate of the amounts which are calculated by the
billing authorities to which the Authority has power to issue
precepts as respects the special item (“the billing authorities
concerned”) as their council tax bases for the year for their areas
10
and are notified by them to the Authority within the prescribed
period.”
(8)
Omit subsections (5) and (6).
(9)
In subsection (9) for paragraph (b) substitute—
“(b)
provide for rules governing the making of any calculation
15
under or by virtue of that subsection (whether by adding
provisions to, or deleting or amending provisions of, this
section, or by a combination of those methods).”
63
Council tax calculation by local precepting authorities in England
Before section 50 of the Local Government Finance Act 1992 insert—
20
“49A
Calculation of council tax requirement by authorities in England
(1)
In relation to each financial year a local precepting authority in England
must make the calculations required by this section.
(2)
The authority must calculate the aggregate of—
(a)
the expenditure the authority estimates it will incur in the year
25
in performing its functions and will charge to a revenue account
for the year in accordance with proper practices,
(b)
such allowance as the authority estimates will be appropriate
for contingencies in relation to amounts to be charged or
credited to a revenue account for the year in accordance with
30
proper practices,
(c)
the financial reserves which the authority estimates it will be
appropriate to raise in the year for meeting its estimated future
expenditure, and
(d)
such financial reserves as are sufficient to meet so much of the
35
amount estimated by the authority to be a revenue account
deficit for any earlier financial year as has not already been
provided for.
(3)
The authority must calculate the aggregate of—
(a)
the income which it estimates will accrue to it in the year and
40
which it will credit to a revenue account for the year in