Local Government Act 2003

39 Payments towards local authority indebtedness

(1) The Secretary of State may, if he thinks it appropriate, make payments to a local authority in England for application by the authority in reducing or extinguishing such debt (whether then due or not) of the authority as he thinks fit.

(2) The National Assembly for Wales may, if it thinks it appropriate, make payments to a local authority in Wales for application by the authority in reducing or extinguishing such debt (whether then due or not) of the authority as the Assembly thinks fit.

(3) The person making payments to a local authority under this section may specify how the payments are to be applied by the authority and may in particular specify—

(a) the debt or debts to be extinguished, or

(b) the debt or debts to be reduced.

(4) A payment under this section may be made subject to conditions imposed by the person making the payment.

(5) The conditions that may be imposed under subsection (4) include (in particular) conditions relating to the repayment in specified circumstances of all or part of the payment.

(6) Payments made to a local authority under this section may not be applied in reducing or extinguishing any debt of the authority to the Public Works Loan Commissioners.

(7) In this section “local authority” means—

(a) in relation to England—

(i) a district council,

(ii) a county council that is the council for a county in which there are no district councils,

(iii) a London borough council,

(iv) the Common Council of the City of London, or

(v) the Council of the Isles of Scilly; and

(b) in relation to Wales, a county council or a county borough council.