2(1)A comparison shall be made between—
(a)the total of the amounts carried to the credit of the local authority's housing revenue account, as adjusted in accordance with this paragraph, for the relevant financial year (in this paragraph referred to as the " credits "), and
(b)the total of the amounts carried to the debit of that account, as adjusted as aforesaid, for that year (in this paragraph referred to as the " debits ").
(2)For the purposes of the comparison required by sub-paragraph (1) of this paragraph—
(a)it shall be assumed that in the credits, for the income for the relevant financial year from rents in respect of the houses to which the said account relates and any amounts carried to the credit of the account for that year under sub-paragraphs (4) and (5) of paragraph 1 of Schedule 7 to this Act, there has been substituted an amount equal to the local authority's total housing valuation for the relevant financial year multiplied by the fraction determined in respect of the relevant financial year by the Secretary of State in accordance with Part IV of this Schedule ;
(b)there shall be excluded from the debits any expenditure by way of rebates from rents ;
(c)there shall be excluded from the debits any surplus shown in the account at the end of the relevant financial year and from the credits any surplus brought forward from the account for the immediately preceding financial year.
(3)If it appears to the Secretary of State that any amount, or part of any amount, carried to the credit or to the debit of the local authority's housing revenue account for the relevant financial year ought to be left out of account for the purposes of the comparison required as aforesaid, he may, after consulting the authority, direct that for the purposes of that comparison the said amount or part of that amount shall be excluded from the credits or from the debits, as the case may be.
3If on the comparison required as aforesaid being made there is a deficit, the amount of that deficit shall be reduced by the amount which bears to that deficit—
(a)in the case of any house completed before the first day of the financial year commencing in 1968, the same proportion as the amount of the exchequer equalisation grant payable to the local authority for the relevant financial year under the [1954 c. 13.] Local Government (Financial Provisions) (Scotland) Act 1954 bears to the authority's relevant local expenditure as certified by the Secretary of State to have been estimated under the said Act of 1954 according to the latest estimate made before the end of the relevant financial year ; and
(b)in the case of any house completed on or after the first day of the financial year commencing in 1968, the same proportion as the amount of the resources element of the rate support grant payable to the local authority for the relevant financial year under the [1966 c. 51.] Local Government (Scotland) Act 1966 bears to the authority's relevant local expenditure as certified by the Secretary of State to have been estimated according to the latest estimate made before the end of the relevant financial year, as calculated for the purposes of Part II of Schedule 1 to that Act in accordance with the provisions of paragraphs 4 and 5 of the said Part II,
and where the amount of the deficit as so reduced exceeds the product of a rate of two shillings and sixpence, the Secretary of State shall pay to the authority an additional Exchequer contribution, the amount of which shall be determined according to the following Table—
| Where the amount of the local authority's reduced deficit— | Amount of additional Exchequer contribution— |
| exceeds the product of a rate of two shillings and sixpence but not of a rate of three shillings and sixpence | fifteen pounds |
| exceeds the product of a rate of three shillings and sixpence but not of a rate of four shillings and sixpence | thirty pounds |
| exceeds the product of a rate of four shillings and sixpence but not of a rate of five shillings and sixpence | forty-five pounds |
| exceeds the product of a rate of five shillings and sixpence but not of a rate of six shillings and sixpence | sixty pounds |
| exceeds the product of a rate of six shillings and sixpence | seventy-five pounds |
4(1)This paragraph applies to any house completed on or after the first day of the financial year commencing in 1967.
(2)Paragraph 3 of this Schedule shall apply to any house to which this paragraph applies, but as if for the references to the sum of two shillings and sixpence and to each of the sums listed in column 1 of the Table there were substituted respectively references to each of those sums adjusted by—
(a)dividing by the estimated aggregate product of a penny rate for the areas of all local authorities for the relevant financial year or, where that year was not a year of revaluation, for the last preceding year of revaluation, and
(b)multiplying by the said estimated aggregate for the financial year commencing in 1965,
and rounded off to the nearest penny.
(3)In sub-paragraph (2) of this paragraph, " year of revaluation " has the same meaning as in section 9 of the [1956 c. 60.] Valuation and Rating (Scotland) Act 1956.
5For the purposes of the calculations required by this Part of this Schedule to be made in relation to any local authority for any financial year there shall be used such accounts, whether provisional or final, of the authority (being accounts for that financial year) as the Secretary of State may direct; and if provisional accounts are used nothing in this Part of this Schedule shall be taken to require the making of any recalculation on the final accounts becoming available.