(1)Where a local authority have (whether before or after the commencement of this Act) for the purpose of discharging any of their duties under Part VII of the principal Act, acquired the right to use any government war buildings, and the Secretary of State has approved for the purposes of this section arrangements made by the authority for using those buildings, whether with or without alterations, for providing temporary housing accommodation, then—
(a)if the Secretary of State estimates that the local authority will incur a loss in any year in respect of the provision of housing accommodation in pursuance of the arrangements, he shall make to the authority an Exchequer contribution for that year of a sum equivalent to the estimated loss; and
(b)if the Secretary of State estimates that the local authority will make a profit in any year in respect of the provision of housing accommodation in pursuance of the arrangements, the authority shall pay to him in respect of that year a sum equivalent to the estimated profit.
(2)For the purposes of any such estimate there shall be deemed to accrue to a local authority, in respect of each house provided by the authority in pursuance of any such arrangements as aforesaid, in addition to any other income accruing from the house—
(a)where the local authority are the council of a county in which the density of the population does not exceed one hundred per square mile, or are the council of a burgh of which the population does not exceed two thousand, the sum of six pounds a year; and
(b)in any other case, the sum of eight pounds a year.
(3)Where any buildings are demolished by a local authority upon ceasing to be used for the purpose of providing housing accommodation in pursuance of such arrangements as aforesaid, then—
(a)the Secretary of State shall pay to the local authority the cost of demolition ; and
(b)any sums realised by the local authority by the disposal of materials derived from the demolished buildings shall be paid by the authority to the Secretary of State.
(4)In this section the expression " government war building " means any building which constitutes government war works as defined by section 59 of the [1945 c. 43.] Requisitioned Land and War Works Act 1945, and the expression " alterations" includes adaptations, enlargements and improvements.