Housing (Financial Provisions) (Scotland) Act 1968

50 Power of local authority to guarantee repayment of advances by building societies, etc., and Exchequer contributions to loss thereby incurred

(1) A local authority may, in accordance with proposals in that behalf made by them and approved by the Secretary of State, guarantee the repayment to a building society within the meaning of the [1962 c. 37.] Building Societies Act 1962 or a society registered under the [1965 c. 12.] Industrial and Provident Societies Act 1965 of any advances, with interest thereon, made by the society to any of its members for the purpose of enabling them to build or acquire houses, whether within or outside the district of the authority.

(2) Where, on the submission to the Secretary of State by a local authority of proposals under this section, the Secretary of State is satisfied that the proposed guarantee extends only to the principal of, and interest on, the amount by which the sum to be advanced by the society in question exceeds the sum which would normally be advanced by it without the guarantee of the authority, and that the liability under the guarantee of the authority cannot be greater than two-thirds of that principal and interest, the Secretary of State, if he approves the proposals, may, with the consent of the Treasury, undertake to make to the authority an Exchequer contribution of not more than one-half of any loss sustained by them under the terms of the guarantee.