Local Government Act 2003

Borrowing

3 (1) Where a local authority meets any expenditure by borrowing, it shall in each financial year debit the appropriate amount to the account from which that expenditure would otherwise fall to be met; but that duty shall not prevent the authority debiting a larger amount to that account.

(2) The appropriate amount for the purposes of sub-paragraph (1) is a sum equivalent to an instalment of principal and interest combined such that if paid annually it would secure the payment of interest at the due rate on the outstanding principal together with the repayment of the principal not later than the end of the fixed period.

(3) Sub-paragraph (1) has effect subject to sub-paragraph (4) if—

(a) a local authority makes an advance to any other person and the expenditure incurred in making the advance is met by borrowing, and

(b) the terms of that advance are such that repayment is to be made otherwise than by equal instalments of principal and interest combined.

(4) The local authority may debit to the account from which the expenditure met by the borrowing would otherwise fall to be met sums of different amounts (whether or not including instalments of principal) in respect of different financial years in order to take account of the terms on which its advance falls to be repaid.