Local Government (Scotland) Act 1947

Interest account.

18 (1) There shall be charged to the interest account and credited to each account of the council which has from time to time during the year any revenue balance in the loans fund interest at a rate to be determined by the council.

(2) There shall be charged to the interest account and credited to each account of the council from which a capital sum (otherwise than by way of reduction of an advance) has during the year been carried to the loans fund interest at a rate to be determined by the council, such rate being equal as nearly as may be to the rate of interest which would be payable on money borrowed during the year of account under a statutory borrowing power.

(3) There shall be charged to each borrowing account of the council which has from time to time during the year received temporary advances of money from the loans fund for current and other expenses, and credited to the interest account interest at a rate to be determined by the council.

(4) Subject to the provisions of this paragraph and of the immediately succeeding paragraph of this rule, the amount of the interest payable during the year by the council on sums borrowed by the council (including interest credited to accounts of the council under paragraphs (1) and (2) of this rule) after deducting the interest received during the year on investments and on loans to other local authorities and the interest charged to borrowing accounts in respect of temporary advances under paragraph (3) of this rule, and allowing for any sums directed by or in accordance with these rules to be debited or credited to the interest account (in this rule referred to as " the net amount "), shall be apportioned at the close of the year between the several borrowing accounts of the council in the manner following, that is to say:—

(a) there shall first be charged or allowed to each borrowing account, in respect of any advance or repayment of an advance which has been made or received during the year the appropriate amount in respect of interest for the period between the date of the advance or repayment and the close of the year, calculated at the average rate payable by the council on money borrowed on account of the loans fund;

(b) the net amount (adjusted to give effect to paragraph (a) hereof) shall be apportioned among the borrowing accounts in the proportion which the advances to each borrowing account outstanding at the commencement of the year bear to the total of the outstanding advances to all the borrowing accounts at such commencement:

Provided that—

(i) the council may, in the case of local bonds under the Housing (Scotland) Acts, 1925 to 1946, or in any other case where special circumstances exist, make such special charge on account of interest as the council think equitable; and

(ii) wherever the charge in respect of interest affects the amount of any Exchequer grant, such charge shall be subject to the approval of the Minister concerned.

(5) The council in their discretion may, in lieu of the provisions of the immediately preceding paragraph of this rule but subject always to the proviso thereto, apportion the net amount for any year among the accounts of the council in proportion to the average amount of advances to each borrowing account during the year, so however that if this method of apportionment is adopted, the amount of advances to each borrowing account shall be adjusted by monthly transfers between the loans fund and the several borrowing accounts, and the monthly amounts so ascertained for each account shall form the basis for calculating the average amount of advances to each borrowing account during the year.