(1)In Schedule 13 to the [1972 c. 70.] Local Government Act 1972 (which among other things relates to funds of local authorities and certain other authorities), for paragraphs 16 to 18 (which relate to capital funds, Housing Revenue Accounts and repairs and renewals funds) there shall be substituted the following paragraphs—
“16(1)A local authority may—
(a)establish such funds as the authority consider appropriate for the purpose of meeting any expenditure of the authority in connection with their functions ; and
(b)make into a fund established under this paragraph such payments as the authority think fit;
but the powers conferred on an authority by paragraph (a) of this sub-paragraph do not authorise the authority to establish either such a loans fund as is mentioned in paragraph 15 of this Schedule or a superannuation fund or a fund for purposes for which the authority are required to maintain a fund by virtue of any enactment.
(2)The money in a fund established under this paragraph shall, until it is applied for the purposes of the fund or in a manner authorised by or under any enactment, be invested in securities in which superannuation funds may for the time being be invested.
(3)Any fund maintained by a local authority for the purposes for which the authority have power by virtue of this paragraph to establish a fund shall be deemed to be established by the authority under this paragraph and may be dealt with accordingly; and it is hereby declared that references in any enactment to a fund established under this paragraph or to an authority by whom a fund is so established include references to a fund which is deemed to be so established or, as the case may be, to the authority who are deemed to have established it.
17(1)A fund established by a local authority under paragraph 16 of this Schedule for purposes other than those of an undertaking mentioned below shall not be used to meet, directly or indirectly, any expenditure incurred by the authority for the purposes of an undertaking of the authority which is a transport, airport, district heating, harbour, dock, pier or ferry undertaking or is a market or a civic restaurant, except that such a fund may be used—
(a)if it is such a fund as is mentioned in sub-paragraph (2) of this paragraph, by the authority for any purpose which is mentioned in that sub-paragraph and is connected with such an undertaking; and
(b)if it is not such a fund as is mentioned in that sub-paragraph and the authority is the Greater London Council, by the Council to meet any expenditure incurred by them for the purposes of a civic restaurant.
(2)A fund established by a local authority under paragraph 16 of this Schedule for the purpose only of providing money to make good loss or damage suffered by the authority as a result of an occurrence against the risk of which the authority can insure shall not be used for any further purpose except that of paying premiums on a policy of insurance against the risk; and while a local authority maintain such a fund in respect of a risk any obligation imposed on the authority by statute or otherwise to insure against the risk shall be deemed to be satisfied unless the statute or a relevant agreement provides otherwise.
(3)A fund established by a county council under paragraph 16 of this Schedule for the purpose of defraying expenditure to be incurred from time to time in repairing, maintaining, replacing and renewing any buildings, works, plant, equipment or articles belonging to the council may also be used for defraying such expenditure in respect of buildings, works, plant, equipment or articles belonging to a police authority which is a committee of the council.
18Money received from the disposal of any property the income from which or the expenditure on which is included in a local authority's Housing Revenue Account shall not without the consent of the Secretary of State be paid into a fund established by the authority under paragraph 16 of this Schedule.”
(2)In paragraph 19 of the said Schedule 13 (which regulates the use by an authority, for any purpose for which the authority has a statutory power to borrow, of money which forms part of a fund to which that paragraph applies and which is not for the time being required for the purposes of the fund), for sub-paragraph (5) (which specifies the funds to which that paragraph applies) there shall be substituted the following sub-paragraph—
“(5)This paragraph applies to any fund established for the repayment or redemption of debt, any superannuation fund and any fund established under paragraph 16 of this Schedule.”
(3)Any power to make a rate or issue a precept which is exercisable by an authority which has established a fund under the paragraph 16 included in the said Schedule 13 by virtue of subsection (1) of this section shall include power to make or issue it for the purpose of making payments into that fund.