(1)For the purpose of enabling the Secretary of State to prescribe a maximum under section 1 above for the rate made or precept issued by a designated authority the Secretary of State shall determine a level for its total expenditure in the financial year for which the maximum is to have effect.
(2)The power to determine a level for the total expenditure of a designated authority shall be exercised in accordance with principles determined by the Secretary of State and, in the case of an authority falling within any of the classes specified in subsection (6) of section 2 above, those principles shall be the same either for all authorities falling within that class or for all of them which respectively have and have not been designated under that section in the previous financial year.
(3)The Secretary of State shall serve on each designated authority a notice stating the level determined by him in the case of that authority.
(4)Any authority on which a notice is served under subsection (3) above may, within the period specified in the notice, apply to the Secretary of State for a re-determination of the level stated in the notice at a greater amount; and any such application shall be accompanied by such information in such form as the Secretary of State may require.
(5)Where an application is made in accordance with subsection (4) above the Secretary of State may, after considering the information submitted with it, any additional information furnished by the applicant and any other matters that he thinks relevant, either confirm his original determination or re-determine the level at a greater or smaller amount; and in making any such re-determination the Secretary of State may depart from the principles referred to in subsection (2) above.
(6)Where under subsection (5) above the Secretary of State re-determines a level at a greater amount he may impose on the authority in question such requirements relating to its expenditure or financial management as he thinks appropriate ; and it shall be the duty of the authority to comply with any such requirements and to report to the Secretary of State whenever he so directs on the extent to which those requirements have been complied with.
(7)The duties of an authority under subsection (6) above shall be enforceable at the suit of the Secretary of State; and where an authority fails to comply with any such duty the Secretary of State may designate the authority under section 2 above in relation to a subsequent financial year without regard to subsection (2) of that section.
(8)The Secretary of State's decision under subsection (5) and any requirements imposed by him under subsection (6) above shall be stated in a notice served by him on the authority concerned.
(9)In making a decision under subsection (5) above the Secretary of State shall have regard to the extent (if any) to which the authority's proposed expenditure is to consist of contributions to charities registered, or excepted from registration, under section 4 of the [1960 c. 58.] Charities Act 1960.