Transport Act 1968

12 Borrowing powers of Executive

(1) The provisions of this section shall have effect with respect to borrowing by the Executive for a designated area.

(2) The Executive may borrow temporarily, by way of overdraft or otherwise, from any person such sums as they may require for meeting their obligations and discharging their functions under this Part of this Act; but the Executive shall ensure that the aggregate of the amounts outstanding in respect of any temporary loans raised by the Executive under this subsection or raised by any subsidiary of the Executive does not at any time exceed such amount as the Authority for the area may for the time being have approved.

(3) The Executive may, with the approval of the Authority for the area, borrow otherwise than by way of temporary loan from any person and in any manner such sums as the Executive may require for all or any of the following purposes, namely—

(a) for meeting any expenses properly chargeable to capital, being expenses incurred in connection with the provision or improvement of assets in connection with their business;

(b) for the provision of working capital;

(c) for acquiring an undertaking or part of an undertaking ;

(d) for the making of any payment which they are required by or under this Part of this Act to make by way of compensation or by way of such contributions as are mentioned in section 17(2)(g) of this Act;

(e) for subscribing for or acquiring securities of a body corporate otherwise than by way of investment;

(f) for the payment of interest charged to capital account under section 11(3) of this Act;

(g) to pay off any debt incurred by the Executive or any liability assumed by or transferred to the Executive in pursuance of this Part of this Act;

(h) for making any loan, or fulfilling any guarantee given, in pursuance of the powers conferred by section 10(1)(xviii) of this Act;

(j) for any' purpose for which capital moneys are properly applicable, whether or not specified in the foregoing paragraphs of this subsection ;

and the Executive shall exercise their control over any subsidiary of theirs so as to ensure that the subsidiary does not borrow otherwise than by way of temporary loan from any person without the approval of the Authority or for any purpose other than purposes of the subsidiary such as are specified in paragraphs (a) to (e) and (j) of this subsection or for paying off any debt incurred by the subsidiary.

(4) Each of the councils of constituent areas shall have power to lend money to the Executive and, with the consent of the Minister, to borrow money for that purpose; and where any sum is borrowed by such a council by virtue of this subsection—

(a) the council shall ensure so far as it is reasonably practicable to do so that having regard to all the circumstances existing at the time when the loan to the Executive is made the rate of interest agreed with the Executive is such that no loss is incurred by the council in respect of that loan to the Executive;

(b) it shall be lawful for the council to suspend for such period as they may think fit any annual provision required to be made by virtue of any enactment for the time being in force for the repayment of that sum.

(5) All moneys borrowed by the Executive shall be charged indifferently on all their revenues, and all securities created by the Executive shall rank equally without any priority; but nothing in this subsection shall—

(a) apply to any money borrowed by way of temporary loan without security ; or

(b) affect any right to priority conferred by a security for any liability assumed by or transferred to the Executive in pursuance of this Act.

(6) The provisions of this section shall have effect subject to any order made under section 1 of the [1946 c. 58.] Borrowing (Control and Guarantees) Act 1946, and for the purposes of that Act and any such order the Executive shall be deemed to be a local authority within the meaning of that Act.

(7) The Executive shall be deemed to be a local authority for the purposes of—

(a) the enactments relating to loans by or borrowing from the Public Works Loan Commissioners;

(b) section 203 of the [1933 c. 51.] Local Government Act 1933 and section 278 of the [1947 c. 43.] Local Government (Scotland) Act 1947 (which relieve lenders from making certain inquiries).