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Local Government and Housing Act 1989

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Local Government and Housing Act 1989

1989 CHAPTER 42

An Act to make provision with respect to the members, officers and otherstaff and the procedure of local authorities; to amend Part III of the LocalGovernment Act 1974 and Part II of the Local Government (Scotland) Act 1975 and to provide for a national code of local government conduct; to makefurther provision about the finances and expenditure of local authorities(including provision with respect to housing subsidies) and about companiesin which local authorities have interests; to make provision for and inconnection with renewal areas, grants towards the cost of improvement andrepair of housing accommodation and the carrying out of works of maintenance,repair and improvement; to amend the Housing Act 1985 and Part III of theLocal Government Finance Act 1982; to make amendments of and consequentialupon Parts I, II and IV of the Housing Act 1988; to amend the Local GovernmentFinance Act 1988 and the Abolition of Domestic Rates Etc. (Scotland) Act 1987and certain enactments relating, as respects Scotland, to rating andvaluation, and to provide for the making of grants; to make provision withrespect to the imposition of charges by local authorities; to make furtherprovision about certain existing grants and about financial assistance to andplanning by local authorities in respect of emergencies; to amend sections 102and 211 of the Local Government (Scotland) Act 1973; to amend the Local LandCharges Act 1975; to enable local authorities in Wales to be known solely byWelsh language names; to provide for the transfer of new town housing stock;to amend certain of the provisions of the Housing (Scotland) Act 1987 relatingto a secure tenant’s right to purchase his house; to amend section 47 of theRace Relations Act 1976; to confer certain powers on the Housing Corporation,Housing for Wales and Scottish Homes; to make provision about security oftenure for certain tenants under long tenancies; to provide for the making ofgrants and giving of guarantees in respect of certain activities carried onin relation to the construction industry; to provide for the repeal of certainenactments relating to improvement notices, town development and educationsupport grants; to make, as respects Scotland, further provision in relationto the phasing of progression to registered rent for houses let by housingassociations or Scottish Homes and in relation to the circumstances in whichrent increases under assured tenancies may be secured; and for connectedpurposes.

[16th November 1989]

X1Be it enacted by the Queen’s most Excellent Majesty, by and with theadvice and consent of the Lords Spiritual and Temporal, and Commons, in thispresent Parliament assembled, and by the authority of the same, asfollows:—

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Editorial Information

X1The text of ss. 74–138, 157, 161–183,190–193, 194(1), 195, Schs. 4, 9, Sch. 11 paras. 31, 32, 42, 58,62–88, 93–95, 99, 100, 107, 110–112 was taken from S.I.F.Group 61 (Housing), ss. 187, 193, 195 from S.I.F. Group 64 (IndustrialDevelopment), ss. 149(6), 186, 190–193, 194(1), 195, Schs. 7, 10, Sch.11 paras. 8–13, 49–54, 60, 61, 89–91, 101–106, 108,109, 112 from S.I.F. Group 75:1 (Landlord and Tenant: General, E.&W.), ss.1(1)–(3)(5)–(8), 2–13, 15–22, 23(1), 24–26, 28,30(2), 31, 32(1), 33–35, 36(1)–(8), 37–73, 139,146–158, 160, 184, 188–195, Schs. 1–3, 5, 8, Sch. 11 paras.1–7, 14, 16–30, 37–41, 47, 48, 56, 57, 59, 92, 96–98,113, Sch. 11 paras. 1–7, 14, 16–30, 37–41, 47, 48, 56, 57,59, 92, 96–98, 113, Sch. 12 from S.I.F. Group 81:1 (Local Government:General, E.&W.), and ss. 1(1)(2)(4)–(8), 2–12, 14–21,23(2), 27, 29, 30(1), 31, 32(2), 36(9), 140–145, 150–153, 155,157, 159, 185, 190, 192, 194(1), 195, Schs. 1, 6, Sch. 11 paras. 15,33–36, 43–46, 55, 96, 97 from S.I.F. Group 81:2 (Local Government:General, S.).

Modifications etc. (not altering text)

C1Act: (except ss. 43(2), 53(1) and 54(1) so far as they relate to a fire authority or police authority, and except s. 43(3)) transfer of functions (W.) (1.7.1999) by S.I. 1999/672, art. 2, Sch. 1

Part IE+W+S Local Authority Members, Officers, Staff and Committees etc.

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Modifications etc. (not altering text)

C2Pt. I (ss. 1-21) applied (temp. from 4.5.1995 to 31.3.1996) by S.I. 1995/1042, art. 4(1)

Pt. I (ss. 1-21): power conferred to make provisions about matters of the kind dealt with in this part (1.9.1997) by 1997 c. 50, s. 44(1), Sch. 4 para. (j)(i); S.I. 1997/1930, art. 2(1)(2)(m) (subject to art. 2(3))

Pt. I (ss. 1-21): extended (E.W.) (26.10.2000 for E. and 28.7.2001 for W.) by 2000 c. 22, ss. 23, 108(4), Sch. 1 para. 3(13); S.I. 2000/2849, art. 2(c)

Political restriction of officers and staffE+W+S

1 Disqualification and political restriction of certain officers and staff.E+W+S

(1)A person shall be disqualified from becoming (whether by election orotherwise) or remaining a member of a local authority if he holds apolitically restricted post under that local authority or any other localauthority in Great Britain.

(2)In the M1House of Commons Disqualification Act 1975, in Part III of Schedule 1 (other disqualifying offices) there shall be inserted at the appropriate place—

Person holding a politically restricted post, within the meaning of Part I of the Local Government and Housing Act 1989, under a local authority, within the meaning of that Part.

(3)In section 80 of the M2Local Government Act 1972 (disqualification for election and holding office as member of local authority)—

(a)in subsection (1)(a) (paid office holders and employees), the words “joint board, joint authority or” shall be omitted; and

(b)in subsection (6) (extension of meaning of “local authority”), after the word “includes” there shall be inserted “ a joint board and ”.

(4)In section 31 of the M3Local Government (Scotland) Act 1973 (which makes corresponding provision for Scotland)—

(a)in subsection (1)(a)(ii), the words “or joint board” shall be omitted; and

(b)after subsection (1) there shall be inserted the following subsection—

(1A)A person is disqualified for being a member of a joint board if he or a partner of his holds any paid office or employment (other than the office of chairman or vice-chairman of the board) or other place of profit in the gift or disposal of the board.

(5)The terms of appointment or conditions of employment of every person holding a politically restricted post under a local authority (including persons appointed to such posts before the coming into force of this section) shall be deemed to incorporate such requirements for restricting his political activities as may be prescribed for the purposes of this subsection by regulations made by the Secretary of State.

(6)Regulations under subsection (5) above may contain such incidental provision and such supplemental, consequential and transitional provision in connection with their other provisions as the Secretary of State considers appropriate and, without prejudice to section 190(1) below, may contain such exceptions for persons appointed in pursuance of section 9 below as he thinks fit.

(7)So far as it has effect in relation to disqualification for election, this section has effect with respect to any election occurring not less than two months after the coming into force of this section and, so far as it relates to becoming in any other way a member of a local authority, this section has effect with respect to any action which, apart from this section, would result in a person becoming a member of the authority not less than two months after the coming into force of this section.

(8)If, immediately before the expiry of the period of two months referred to in subsection (7) above, a person who is a member of a local authority holds a politically restricted post under that or any other local authority, nothing in this section shall apply to him until the expiry of the period for which he was elected or for which he otherwise became a member of the authority.

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Modifications etc. (not altering text)

C4S. 1 applied (S.) (temp. 6.4.1995 to 1.4.1996) by S.I. 1995/789, art. 2, Sch. entry 11

S. 1 extended (E.W.) (19.9.1995) by 1995 c. 25, ss. 63(5), 125(2), Sch. 7 para. 7(4) (with ss. 7(6), 115, 117, Sch. 8 para. 7)

S. 1 extended (8.5.2000) by 1999 c. 29, ss. 68, 70 (with Sch. 12 para. 9(1)); S.I. 2000/801, art. 2(2)(b), Sch. Pt. 2

Marginal Citations

2 Politically restricted posts.E+W+S

(1)The following persons are to be regarded for the purposes of this Part as holding politically restricted posts under a local authority—

(a)the person designated under section 4 below as the head of the authority’s paid service;

(b)the statutory chief officers;

(c)a non-statutory chief officer;

(d)a deputy chief officer;

(e)the monitoring officer designated under section 5 below;

(f)any person holding a post to which he was appointed in pursuance of section 9 below; and

(g)any person not falling within paragraphs (a) to (f) above whose post is for the time being specified by the authority in a list maintained in accordance with subsection (2) below and any directions under section 3 below or with section 100G(2) of the M4Local Government Act 1972 or section 50G(2) of the M5Local Government (Scotland) Act 1973 (list of officers to whom powers are delegated).

(2)It shall be the duty of every local authority to prepare and maintain a list of such of the following posts under the authority, namely—

(a)the full time posts the annual rate of remuneration in respect of which is or exceeds £19,500 or such higher amount as may be specified in or determined under regulations made by the Secretary of State;

(b)the part time posts the annual rate of remuneration in respect of which would be or exceed that amount if they were full time posts in respect of which remuneration were paid at the same rate as for the part time post; and

(c)posts not falling within paragraph (a) or (b) above the duties of which appear to the authority to fall within subsection (3) below,

as are not posts for the time being exempted under section 3 below, posts for the time being listed under section 100G(2) of the M6Local Government Act 1972 or section 50G(2) of the M7Local Government (Scotland) Act 1973 or posts of a description specified in regulations made by the Secretary of State for the purposes of this subsection.

(3)The duties of a post under a local authority fall within this subsection if they consist in or involve one or both of the following, that is to say—

(a)giving advice on a regular basis to the authority themselves, to any committee or sub-committee of the authority or to any joint committee on which the authority are represented[F1 or, where the authority are operating executive arrangements, to the executive of the authority, to any committee of that executive, or to any member of that executive who is also a member of the authority]F1;

(b)speaking on behalf of the authority on a regular basis to journalists or broadcasters.

(4)It shall be the duty of every local authority to deposit the first list prepared under subsection (2) above with their proper officer before the expiry of the period of two months beginning with the coming into force of this section; and it shall also be their duty, on subsequently making any modifications of that list, to deposit a revised list with that officer.

(5)It shall be the duty of every local authority in performing their duties under this section to have regard to such general advice as may be given by virtue of subsection (1)(b) of section 3 below by a person appointed under that subsection.

(6)In this section “the statutory chief officers” means—

(a)the chief education officer [F2or director of education] appointed under [F3section 532 of the Education Act 1996][F2or section 78 of the M8Education (Scotland) Act 1980];

(b)the chief officer of a fire brigade maintained under the M9Fire Services Act 1947 and appointed under regulations made under section 18(1)(a) of that Act;

(c)the director of social services or [F4chief social work officer] appointed under section 6 of the M10Local Authority Social Services Act 1970 or section 3 of the M11Social Work (Scotland) Act 1968; and

(d)the officer having responsibility, for the purposes of section 151 of the Local Government Act 1972, section 73 of the M12Local Government Act 1985, section 112 of the M13Local Government Finance Act 1988 or section 6 below or for the purposes of section 95 of the M14Local Government (Scotland) Act 1973, for the administration of the authority’s financial affairs.

(7)In this section “non-statutory chief officer” means, subject to the following provisions of this section—

(a)a person for whom the head of the authority’s paid service is directly responsible;

(b)a person who, as respects all or most of the duties of his post, is required to report directly or is directly accountable to the head of the authority’s paid service; and

(c)any person who, as respects all or most of the duties of his post, is required to report directly or is directly accountable to the local authority themselves or any committee or sub-committee of the authority.

(8)In this section “deputy chief officer” means, subject to the following provisions of this section, a person who, as respects all or most of the duties of his post, is required to report directly or is directly accountable to one or more of the statutory or non-statutory chief officers.

(9)A person whose duties are solely secretarial or clerical or are otherwise in the nature of support services shall not be regarded as a non-statutory chief officer or a deputy chief officer for the purposes of this Part.

(10)Nothing in this section shall have the effect of requiring any person to be regarded as holding a politically restricted post by reason of his holding—

(a)the post of head teacher or principal of a school, college or other educational institution or establishment which, in England and Wales, is maintained or assisted by a local education authority or, in Scotland, is under the management of or is assisted by an education authority; or

(b)any other post as a teacher or lecturer in any such school, college, institution or establishment,

or of requiring any such post to be included in any list prepared and maintained under this section.

(11)Regulations under this section may contain such incidental provision and such supplemental, consequential and transitional provision in connection with their other provisions as the Secretary of State considers appropriate.

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Amendments (Textual)

F1Words in s. 2(3)(a) inserted (E.) (11.7.2001) and (W.) (1.4.2002) by S.I. 2001/2237, arts. 1(2), 22; S.I. 2002/808, arts. 1(2), 21

F3Words in s. 2(6)(a) substituted (1.11.1996) by 1996 c. 56, ss. 582(1), 583(2), Sch. 37 para. 95 (with s. 1(4), Sch. 39 paras. 30, 39)

Modifications etc. (not altering text)

C5S. 2 extended (E.W.) (19.9.1995) by 1995 c. 25, ss. 63(5), 125(2), Sch. 7 para. 7(4) (with ss. 7(6), 115, 117, Sch. 8 para. 7)

Marginal Citations

3 Grant and supervision of exemptions from political restriction.E+W+S

(1)It shall be the duty of the Secretary of State to appoint a person—

(a)to carry out the functions in relation to political restriction which are conferred by subsections (2) to (7) below; and

(b)to give such general advice with respect to the determination of questions arising by virtue of section 2(3) above as that person considers appropriate after consulting such representatives of local government and such organisations appearing to him to represent employees in local government as he considers appropriate.

(2)A person appointed under subsection (1) above—

(a)shall consider any application for exemption from political restrictionwhich is made to him, in respect of any post under a local authority, by the holder for the time being of that post; and

(b)may, on the application of any person or otherwise, give directions to a local authority requiring it to include a post in the list maintained by the authority under section 2(2) above.

(3)An application shall not be made by virtue of subsection (2)(a) above in respect of a post under a local authority except where—

(a)the authority have specified or are proposing to specify the post in the list maintained by the authority under subsection (2) of section 2 above; and

(b)in the case of a post falling within paragraph (a) or (b) of that subsection, the authority have certified whether or not, in their opinion, the duties of the post fall within subsection (3) of that section;

and it shall be the duty of a local authority to give a certificate forthe purposes of paragraph (b) above in relation to any post if they are requested to do so by the holder of that post.

(4)If, on an application made by virtue of subsection (2)(a) above in respect of any post under a local authority, the person to whom the application is made is satisfied that the duties of the post do not fall within section 2(3)above, that person shall direct—

(a)that, for so long as the direction has effect in accordance with its terms, the post is not to be regarded as a politically restricted post; and

(b)that, accordingly, the post is not to be specified in the list maintained by that authority under section 2(2) above or, as the case may be, is to be removed from that list.

(5)A person appointed under subsection (1) above shall not give a directionunder subsection (2)(b) above in respect of any post under a local authority except where he is satisfied that the post—

(a)is a post the duties of which fall within section 2(3) above; and

(b)is neither included in any list maintained by the authority in accordance with section 2(2) above, section 100G(2) of the M15Local Government Act 1972 or section 50G(2) of the M16Local Government (Scotland) Act 1973 nor of a description specified in any regulations under section 2(2) above.

(6)It shall be the duty of a local authority—

(a)to give a person appointed under subsection (1) above all such information as that person may reasonably require for the purpose of carrying out his functions under this section;

(b)to comply with any direction under this section with respect to the list maintained by the authority; and

(c)on being given a direction by virtue of subsection (2)(b) above, to notify the terms of the direction to the holder for the time being of the post to which the direction relates.

(7)It shall be the duty of a person appointed under subsection (1) above, in carrying out his functions under this section, to give priority, according to the time available before the election, to any application made by virtue of subsection (2)(a) above by a person who certifies that it is made for the purpose of enabling him to be a candidate in a forthcoming election.

(8)The Secretary of State may—

(a)appoint different persons under subsection (1) above for England and for Wales;

(b)provide for the appointment of such numbers of staff to assist any person appointed under that subsection, and to act on that person’s behalf, as the Secretary of State may with the consent of the Treasury determine;

(c)pay to or in respect of a person appointed under that subsection andmembers of such a person’s staff such remuneration and such other sums by way of, or towards, the payment of pensions, allowances and gratuities as the Secretary of State may so determine; and

(d)provide for a person appointed under that subsection and such a person’s staff to hold office on such other terms as the Secretary of State may so determine.

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Modifications etc. (not altering text)

C6S. 3 applied (S.) (temp. 6.4.1995 to 31.3.1996) by S.I. 1995/789, art. 2, Sch. entry 11

S. 3 extended (E.W.) (19.9.1995) by 1995 c. 25, ss. 63(5), 125(2), Sch. 7 para. 7(4) (with ss. 7(6), 115, 117, Sch. 8 para. 7)

S. 3 extended (8.5.2000) by 1999 c. 29, ss. 68, 70 (with Sch. 12 para. 9(1)); S.I. 2000/801, art. 2(2)(b), Sch. Pt. 2

Marginal Citations

Duties of particular officersE+W+S

4 Designation and reports of head of paid service.E+W+S

(1)It shall be the duty of every relevant authority—

(a)to designate one of their officers as the head of their paid service; and

(b)to provide that officer with such staff, accommodation and other resources as are, in his opinion, sufficient to allow his duties under this section to be performed.

(2)It shall be the duty of the head of a relevant authority’s paid service,where he considers it appropriate to do so in respect of any proposals of his with respect to any of the matters specified in subsection (3) below, to prepare a report to the authority setting out his proposals.

(3)Those matters are—

(a)the manner in which the discharge by the authority of their different functions is co-ordinated;

(b)the number and grades of staff required by the authority for the discharge of their functions;

(c)the organisation of the authority’s staff; and

(d)the appointment and proper management of the authority’s staff.

(4)It shall be the duty of the head of a relevant authority’s paid service,as soon as practicable after he has prepared a report under this section, to arrange for a copy of it to be sent to each member of the authority.

(5)It shall be the duty of a relevant authority to consider any report under this section by the head of their paid service at a meeting held not more than three months after copies of the report are first sent to members of the authority; and nothing in section 101 of the M17Local Government Act 1972 or in section 56 of [F5, or Schedule 10 or 20 to,] the M18Local Government (Scotland) Act 1973 (delegation) shall apply to the duty imposed by virtue of this subsection.

(6)In this section “relevant authority”—

(a)in relation to England and Wales, means a local authority of any of thedescriptions specified in paragraphs (a) to (e) of section 21(1) below; and

(b)in relation to Scotland, [F6council constituted under section 2 of the Local Government etc. (Scotland) Act 1994].

(7)This section shall come into force at the expiry of the period of two months beginning on the day this Act is passed.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Amendments (Textual)

Modifications etc. (not altering text)

C7S. 4 extended (E.W.) (19.9.1995) by 1995 c. 25, ss. 63(5), 125(2), Sch. 7 para. 13(7)(a) (with ss. 7(6), 115, 117, Sch. 8 para. 7)

S. 4 applied (with modifications) (8.5.2000) by 1999 c. 29, s. 72(1) (with Sch. 12 para. 9(1)); S.I. 2000/801, art. 2(2)(b), Sch. Pt. 2

Marginal Citations

M181973c. 65.

5 Designation and reports of monitoring officer.E+W+S

(1)It shall be the duty of every relevant authority—

(a)to designate one of their officers (to be known as “the monitoring officer”) as the officer responsible for performing the duties imposed by this section [F7and, where relevant, section 5A below]; and

(b)to provide that officer with such staff, accommodation and other resourcesas are, in his opinion, sufficient to allow those duties [F8and, where relevant, the duties under section 5A below] to be performed;

and [F9subject to subsection (1A) below] the officer so designated may be the head of the authority’s paid service [F10(or, in the case of a police authority established under [F11section 3 of the Police Act 1996][F12or the Metropolitan Police Authority], the clerk to the authority)] but shall not be their chief finance officer.

[F13(1A)The officer designated under subsection (1) above by a relevant authority to which this subsection applies may not be the head of that authority’s paid service.]

[F13(1B)Subsection (1A) above applies to the following relevant authorities in England and Wales—

(a)a county council,

(b)a county borough council,

(c)a district council,

(d)a London borough council,

(e)the Greater London Authority, and

(f)the Common Council of the City of London in its capacity as a local authority, police authority or port health authority.]

(2)[F14Subject to subsection (2B),] it shall be the duty of a relevant authority’s monitoring officer, if it at any time appears to him that any proposal, decision or omission by the authority, by any committee, [F15or sub-committee of the authority, by any person holding any office or employment under the authority] or by any joint committee on which the authority are represented constitutes, has given rise to or is likely to or would give rise to—

(a)a contravention by the authority, by any committee, [F15or sub-committee of the authority, by any person holding any office or employment under the authority] or by any such joint committee of any enactment or rule of law [F16or of any code of practice made or approved by or under any enactment]; or

(b)any such maladministration or injustice as is mentioned in Part III of the M19Local Government Act 1974 (Local Commissioners) or Part IIof the M20Local Government (Scotland) Act 1975 (which makes corresponding provision for Scotland),

to prepare a report to the authority with respect to that proposal, decision or omission.

[F17(2A)No duty shall arise by virtue of subsection (2)(b) above unless a Local Commissioner (within the meaning of the M21Local Government Act 1974) has conducted an investigation under Part III of that Act in relation to the proposal, decision or omission concerned.]

[F18(2B)Where a relevant authority are operating executive arrangements, the monitoring officer of the relevant authority shall not make a report under subsection (2) in respect of any proposal, decision or omission unless it is a proposal, decision or omission made otherwise than by or on behalf of the relevant authority’s executive.]

(3)It shall be the duty of a relevant authority’s monitoring officer—

(a)in preparing a report under this section to consult so far as practicable with the [F19person who is for the time being designated as the head of the authority’s paid service under section 4 above] and with their chief finance officer; and

(b)as soon as practicable after such a report has been prepared by him or his deputy, to arrange for a copy of it to be sent to each member of the authority [F20and, in a case where the relevant authority have a mayor and council manager executive, to the council manager of the authority].

(4)The references in subsection (2) above, in relation to a relevant authority in England and Wales, to a committee or sub-committee of the authority and to a joint committee on which they are represented shall be taken to include references to any of the following, that is to say—

[F21(a)any police committee the members of which include persons appointed by the authority;]

(b)any local fisheries committee the members of which include persons so appointed;

F22(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d)any sub-committee appointed by a committee falling within paragraphs (a) to (c) above;

but in relation to any such committee or sub-committee the reference insubsection (3)(b) above to each member of the authority shall have effect as a reference to each member of the committee or, as the case may be, of the committee which appointed the sub-committee.

(5)It shall be the duty of a relevant authority and of any such committee as is mentioned in subsection (4) above—

(a)to consider any report under this section by a monitoring officer or his deputy at a meeting held not more than twenty-one days after copies of the report are first sent to members of the authority or committee; and

(b)without prejudice to any duty imposed by virtue of section 115 of the M22Local Government Finance Act 1988 (duties in respect of conduct involving contraventions of financial obligations) or otherwise, to ensure that no step is taken for giving effect to any proposal or decision to which such a report relates at any time while the implementation of the proposal or decision is suspended in consequence of the report;

and nothing in section 101 of the M23Local Government Act 1972 or in section 56 of [F23, or Schedule 10 or 20 to,] the M24Local Government (Scotland) Act 1973 (delegation) shall apply to the duty imposed by virtue of paragraph (a) above.

(6)For the purposes of paragraph (b) of subsection (5) above the implementation of a proposal or decision to which a report under this section relates shall be suspended in consequence of the report until the end of the first business day after the day on which consideration of that report under paragraph (a) of that subsection is concluded.

(7)The duties of a relevant authority’s monitoring officer under this section shall be performed by him personally or, where he is unable to act owing to absence or illness, personally by such member of his staff as he has for the time being nominated as his deputy for the purposes of this section.

(8)In this section [F24and in section 5A]

  • business day”, in relation to a relevant authority, means any day which is not a Saturday or Sunday, Christmas Day, Good Friday or any day which is a bank holiday under the M25Banking and Financial Dealings Act 1971 in the part of Great Britain where the area of the authority is situated;

  • chief finance officer”, in relation to a relevant authority, means the officer having responsibility, for the purposes of section 151 of the Local Government Act 1972, section 73 of the M26LocalGovernment Act 1985, section 112 of the Local Government Finance Act 1988 [F25, section 127(2) of the Greater London Authority Act 1999] or section 6 below or for the purposes of section 95 of the Local Government (Scotland) Act 1973, for the administration of the authority’s financial affairs; and

  • relevant authority”—

(a)in relation to England and Wales, means a local authority of any of the descriptions specified in paragraphs (a) to [F26(k)] of section 21(1) below; and

(b)in relation to Scotland, means a local authority.

[F27(8A)Any reference in this section to the duties of a monitoring officer imposed by this section, or to the duties of a monitoring officer under this section, shall include a reference to the functions which are conferred on a monitoring officer by virtue of Part III of the Local Government Act 2000.]

(9)This section shall come into force at the expiry of the period of two months beginning on the day this Act is passed.

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Amendments (Textual)

F7Words in s. 5(1)(a) inserted (E.) (11.7.2001) and (W.) (1.4.2002) by S.I. 2001/2237, arts. 1(2), 23(1)(a); S.I. 2002/808, arts. 1(2), 22(1)(a)

F8Words in s. 5(1)(b) inserted (E.) (11.7.2001) and (W.) (1.4.2002) by S.I. 2001/2237, arts. 1(2), 23(1)(b); S.I. 2002/808, arts. 1(2), 22(1)(b)

F9Words in s. 5(1) inserted (E.W.) (28.7.2001) by 2000 c. 22, ss. 107(1), 108(4), Sch. 5 para. 24(1)(2)

F10Words in s. 5(1)(b) inserted (1.10.1994 for specified purposes otherwise 1.4.1995) by 1994 c. 29, s. 43, Sch. 4 Pt. I para. 35(a); S.I. 1994/2025, art. 6; S.I. 1994/3262, art. 4, Sch. (subject to art. 5)

F12Words in s. 5(1) inserted (for certain purposes on the “operative date" (as defined in art. 1(2)(c) of S.I. 2000/1095) and on 3.7.2000 for all other purposes) by 1999 c. 29, s. 325, Sch. 27 para. 62 (with Sch. 12 para. 9(1)); S.I. 2000/1095, art. 4(2)(c)

F14Words in s. 5(2) inserted (E.) (11.7.2001) and (W.) (1.4.2002) by S.I. 2001/2237, arts. 1(2), 23(1)(c); S.I. 2002/808, arts. 1(2), 22(1)(c)

F15Words in s. 5(2) substituted (1.10.1994 for specified purposes otherwise 1.4.1995) by 1994 c. 29, s. 43, Sch. 4 Pt. I para. 35(b); S.I. 1994/2025, art. 6; S.I. 1994/3262, art. 4, Sch. (subject to art. 5)

F16Words in s. 5(2)(a) repealed (E.W.) (28.7.2001) by 2000 c. 22, ss. 107(1)(2), 108(4), Sch. 5 para. 24(1)(4), Sch. 6

F18S. 5(2B) inserted (E.) (11.7.2001) and (W.) (1.4.2002) by S.I. 2001/2237, arts. 1(2), 23(1)(d); S.I. 2002/808, arts. 1(2), 22(1)(d)

F19Words in s. 5(3)(a) substituted (1.10.1994 for specified purposes otherwise 1.4.1995) by 1994 c. 29, s. 43, Sch. 4 Pt. I para. 35(c); S.I. 1994/2025, art. 6; S.I. 1994/3262, art. 4, Sch. (subject to art. 5)

F20Words in s. 5(3)(b) added (E.) (11.7.2001) and (W.) (1.4.2002) by S.I. 2001/2237, arts. 1(2), 23(1)(e); S.I. 2002/808, arts. 1(2), 22(1)(e)

F21S. 5(4)(a) repealed (1.4.1995 (E.W.) otherwiseprosp.) by 1994 c. 29, s. 93, Sch. 9 Pt. I; S.I. 1994/3262, art. 4, Sch. (subject to art. 5)

F24Words in s. 5(8) inserted (E.) (11.7.2001) and (W.) (1.4.2002) by S.I. 2001/2237, arts. 1(2), 23(1)(f); S.I. 2002/808, arts. 1(2), 22(1)(f)

F25S. 5(8): words in the definition of

chief finance officer

inserted (8.5.2000 for specified purposes otherwise 3.7.2000) by 1999 c. 29, s. 132(1)(2) (with Sch. 12 para. 9(1)); S.I. 1999/3434, arts. 3, 4

F26S. 5(8): words in para. (a) of the definition of

relevant authority

substituted (E.W.) (28.7.2001) by 2000 c. 22, ss. 107(1), 108(4), Sch. 5 para. 24(1)(7)

Modifications etc. (not altering text)

C8S. 5 extended (E.W.) (19.9.1995) by 1995 c. 25, ss. 63(5), 125(2), Sch. 7 para. 13(7)(b) (with ss. 7(6), 115, 117, Sch. 8 para. 7)

S. 5 applied (with modifications) (23.11.1995) by S.I. 1995/2803, art. 19(1), Sch. 6 para. 7(3)

S. 5 applied (with modifications) (8.5.2000) by 1999 c. 29, s. 73 (with Sch. 12 para. 9(1)); S.I. 2000/801, art. 2(2)(b), Sch. Pt. 2 (as amended (27.5.2000) by S.I. 2000/1435, art. 2, Sch. 1 Pt. I para. 5 and amended (E.W.) (28.7.2001) by 2000 c. 22, ss. 107, 108(4), Sch. 5 para. 24(5), Sch. 6)

S. 5 extended (with modifications) (8.9.2000) by 2000 asp 10, s. 36, Sch. 5 para. 15 (with s. 32); S.S.I. 2000/312, art. 2

C9S. 5(1) applied (10.5.2000) by S.I. 2000/1095, art. 6(5)(a)

Marginal Citations

[F285A Reports of monitoring officer—local authorities operating executive arrangementsE+W
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Amendments (Textual)

F28S. 5A inserted (E.) (11.7.2001) and (W.) (1.4.2002) by S.I. 2001/3327, arts. 1(2), 23(2); S.I. 2002/808, arts. 1(2), 22(2)

(1)Where a relevant authority are operating executive arrangements, the monitoring officer of that authority shall be responsible for performing the duties imposed by this section.

(2)It shall be the duty of the monitoring officer of a relevant authority that is referred to in subsection (1) above, if at any time it appears to him that any proposal, decision or omission, in the course of the discharge of functions of the relevant authority, by or on behalf of the relevant authority’s executive, constitutes, has given rise to or is likely to or would give rise to any of the events referred to in subsection (3), to prepare a report to the executive of the authority with respect to that proposal, decision or omission.

(3)The events referred to for the purposes of subsection (2) are—

(a)a contravention, by the relevant authority’s executive or any person on behalf of the executive, of any enactment or rule of law; or

(b)any such maladministration or injustice as is mentioned in Part III of the Local Government Act 1974 F29 (Local Commissioners).

(4)No duty shall arise by virtue of subsection (3)(b) above unless a Local Commissioner (within the meaning of the Local Government Act 1974) has conducted an investigation under Part III of that Act in relation to the proposal, decision or omission concerned.

(5)It shall be the duty of an authority’s monitoring officer—

(a)in preparing a report under subsection (2) to consult so far as practicable with the person who is for the time being designated as the head of the authority’s paid service under section 4 above and with their chief finance officer; and

(b)as soon as practicable after such a report has been prepared by him or his deputy, to arrange for a copy of it to be sent to each member of the authority and, where the authority has a mayor and council manager executive, the council manager.

(6)It shall be the duty of the authority’s executive—

(a)to consider any report under this section by a monitoring officer or his deputy at a meeting held not more than twenty-one days after copies of the report are first sent to members of the executive; and

(b)without prejudice to any duty imposed by virtue of section 115B of the Local Government Finance Act 1988 (duties of executive as regards reports) or otherwise, to ensure that no step is taken for giving effect to any proposal or decision to which such a report relates at any time while the implementation of the proposal or decision is suspended in consequence of the report.

(7)For the purposes of paragraph (b) of subsection (6) above the implementation of a proposal or decision to which a report under this section, by a monitoring officer or his deputy, relates shall be suspended in consequence of the report until the end of the first business day after the day on which consideration of that report under paragraph (a) of that subsection is concluded.

(8)As soon as practicable after the executive has concluded its consideration of the report of the monitoring officer or his deputy, the executive shall prepare a report which specifies—

(a)what action (if any) the executive has taken in response to the report of the monitoring officer or his deputy;

(b)what action (if any) the executive proposes to take in response to that report and when it proposes to take that action; and

(c)the reasons for taking the action specified in the executive’s report or, as the case may be, for taking no action.

(9)As soon as practicable after the executive has prepared a report under subsection (8), the executive shall arrange for a copy of it to be sent to each member of the authority and the authority’s monitoring officer.

(10)The duties of an authority’s monitoring officer under this section shall be performed by him personally or, where he is unable to act owing to absence or illness, personally by such member of his staff as he has for the time being nominated as his deputy for the purposes of this section.]

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Amendments (Textual)

6 Officer responsible for financial administration of certain authorities.E+W+S

(1)On and after the commencement day the Common Council shall—

(a)make arrangements for the proper administration of such of its financial affairs as relate to it in its capacity as a local authority, police authority or port health authority, and

(b)secure that one of its officers has responsibility for the administration of those affairs.

(2)Section 17 of the M27City of London Sewers Act 1897 (functions of the chamberlain of the City of London as regards financial affairs) shall cease to have effect on the commencement day.

(3)On and after the commencement day the person having responsibility for the administration of certain of the financial affairs of the Common Council under subsection (1) above shall—

(a)be a member of one or more of the bodies specified in subsection (5)below; or

(b)be the person who immediately before that day was the chamberlain of the City of London; or

(c)be a person who qualifies by virtue of section 113(2)(b) of the M28Local Government Finance Act 1988 (existing office holders) as a person who may be given responsibility for the financial affairs of an authority mentioned in section 111(2)(a) to (k) of that Act; or

(d)fulfil two or more of those conditions.

(4)On and after the commencement day the person having responsibility for the administration of the financial affairs of a new successor body under section 73 of the M29Local Government Act 1985 shall—

(a)be a member of one or more of the bodies specified in subsection (5)below; or

(b)be the person who immediately before that day had responsibility for the administration of the financial affairs of the body concerned under the said section 73; or

(c)be a person who qualifies by virtue of section 113(2)(b) of the Local Government Finance Act 1988 (existing office holders) as a person who may be given responsibility for the financial affairs of an authority mentioned insection 111(2)(a) to (k) of that Act; or

(d)fulfil two or more of those conditions.

(5)The bodies referred to in subsections (3)(a) and (4)(a) above are—

(a)the Institute of Chartered Accountants in England and Wales;

(b)the Institute of Chartered Accountants of Scotland;

(c)the Chartered Association of Certified Accountants;

(d)the Chartered Institute of Public Finance and Accountancy;

(e)the Institute of Chartered Accountants in Ireland;

(f)the Chartered Institute of Management Accountants;

(g)any other body of accountants established in the United Kingdom and forthe time being approved by the Secretary of State for the purposes of this section.

(6)The Secretary of State may make regulations containing, as regards the Common Council and any new successor body to which section 73 of the M30Local Government Act 1985 applies, provisions equivalent to sections 114 to 116 of the M31Local Government Finance Act 1988 (reports etc.) subject to—

(a)modifications to confine the provisions to the Common Council in its capacity as a local authority, police authority or port health authority; and

(b)any other modifications the Secretary of State thinks fit;

and any such regulations may contain such incidental provision and such supplemental, consequential and transitional provision in connection with their other provisions as the Secretary of State considers appropriate.

(7)In this section—

  • the commencement day” means the day on which this section comes into force;

  • the Common Council” means the Common Council of the City of London;

  • new successor body” means a body corporate established at any time by an order under section 67(3) of the Local Government Act 1985 (new body succeeding to residuary body’s functions).

(8)This section shall come into force at the expiry of the period of two months beginning on the day this Act is passed.

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Marginal Citations

M271897 c. cxxxiii.

M281988c. 41.

M301985c. 51.

Appointment and management etc. of staffE+W+S

7 All staff to be appointed on merit.E+W+S

(1)Every appointment of a person to a paid office or employment under—

(a)a local authority or parish or community council in England and Wales, or

(b)a local authority in Scotland,

shall be made on merit.

(2)Subsection (1) above applies to all appointments made by, or by any committee of, a local authority or parish or community council, whether made under section 112 of the M32Local Government Act 1972 or section 64 of the M33Local Government (Scotland) Act 1973 (appointment of staff) or otherwise, but has effect subject to—

F30(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)section 18 of the M34Fire Services Act 1947 (regulations as to appointment etc. of chief officers and fire brigades);

(c)section 7 of the M35Sex Discrimination Act 1975 (discrimination permitted in relation to employment where sex of employee is a genuine occupational qualification);

(d)section 5 of the M36Race Relations Act 1976 (discrimination permitted in relation to employment where being of a particular racial group is a genuine occupational qualification); F31. . .

(e)section 113 of the M37Local Government Finance Act 1988 and section 6 above (qualifications of officers responsible for administration of financial affairs of certain authorities) [F32; and.

F32(f)sections 5 and 6 of the Disability Discrimination Act 1995 (meaning of discrimination and duty to make adjustments).]

(3)This section shall come into force at the expiry of the period of two months beginning on the day this Act is passed.

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Amendments (Textual)

F30S. 7(2)(a) omitted (2.12.1996) by virtue of 1995 c. 50, s. 70(4), Sch. 6 para. 5(a) (with ss. 59, 64, 65); S.I. 1996/1474, art. 2(3), Sch. Pt. III (and repealed (prosp.) by 1995 c. 50, s. 70(3)(5), Sch. 7 (with ss. 59, 64, 65))

F31Word in s. 7(2)(d) omitted (2.12.1996) by virtue of 1995 c. 50, s. 70(4), Sch. 6 para. 5(b) (with ss. 59, 64, 65); S.I. 1996/1474, art. 2(3), Sch. Pt. III (and repealed (prosp.) by 1995 c. 50, s. 70(3)(5), Sch. 7 (with ss. 59, 64, 65)

F32S. 7(2)(f) and preceding “; and" inserted (2.12.1996) by 1995 c. 50, s. 70(4), Sch. 6 para. 5(c) (with ss. 59, 64, 65); S.I. 1996/1474, art. 2(3), Sch. Pt. III

Modifications etc. (not altering text)

Marginal Citations

8 Duty to adopt standing orders with respect to staff.E+W

(1)The Secretary of State may by regulations require relevant authorities, subject to such variations as may be authorised by the regulations—

(a)to incorporate such provision as may be prescribed by the regulations instanding orders relating to their staff; and

(b)to make or refrain from making such other modifications of any such standing orders as may be so prescribed.

(2)For the purposes of this section standing orders relate to the staff of a relevant authority if they make provision for regulating—

(a)the appointment of persons to paid office or employment under the authority; or

(b)the dismissal of persons holding such office or employment and the taking of other disciplinary action against such persons.

(3)Without prejudice to the generality of subsection (1) above, regulations under this section may require a relevant authority’s standing orders—

(a)so to restrict the manner of exercising the power to take steps for or towards the selection of candidates for interview, or for appointment, as to make it exercisable only by the authority themselves, by a committee orsub-committee of the authority or by particular officers of the authority;

(b)to restrict the power of the authority or any of their committees or sub-committees—

(i)to give directions to persons making appointments on their behalf as to the identity of the individuals to be appointed; or

(ii)otherwise to interfere with the making of appointments by such persons;

(c)to require the monitoring officer of the authority to prepare a report tothe authority in respect of every proposed appointment of a person to a politically restricted post;

(d)to require every such report to state whether, in the opinion of the monitoring officer, the proposed appointment can be made—

(i)without any contravention of any provision made by or under this Part; and

(ii)without any matter being taken into account which could not properly be taken into account;

and, if in his opinion it cannot be so made, his reasons; and

(e)to prohibit the authority or any committee, sub-committee or other person acting on their behalf from dismissing or taking other disciplinary action against a person holding office or employment under the authority except in accordance with recommendations contained in a report made to the authority by an independent person of such a description as is prescribed by the regulations.

(4)Regulations under this section may contain such incidental provision and such supplemental, consequential and transitional provision in connection with their other provisions as the Secretary of State considers appropriate; and that provision may include—

(a)provision which, for the purposes of any such restriction as is mentioned in subsection (3) above, makes modifications of any enactment with respect to the delegation of a relevant authority’s functions;

(b)provision which (with or without modifications) applies provisions of section 5 above in relation to any report prepared in consequence of regulations made by virtue of subsection (3)(c) above;

(c)provision specifying the consequences—

(i)in relation to any appointment or contract of employment;

(ii)in relation to any proceedings on a complaint to an [F33employment tribunal]; and

(iii)in relation to any expenditure incurred by the authority,

of any contravention of standing orders made in pursuance of the regulations; and

[F34(d)without prejudice to section 191(1) below, special provision in relation to the appointment of persons—

(i)in pursuance of section 9 below;

(ii)for the purposes of functions exercised by joint committees on which relevant authorities are represented; and

(iii)in pursuance of regulations made under paragraph 6 of Schedule 1 to the Local Government Act 2000 (mayor’s assistant).]

(5)In this section “relevant authority”—

(a)in relation to England and Wales, means a local authority of any of the descriptions specified in paragraphs (a) to (e) of section 21(1) below; and

(b)in relation to Scotland, means a regional, islands or district council.

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Extent Information

E1This version of this provision extends to England and Wales only; a separate version has been created for Scotland only

Amendments (Textual)

F33Words in s. 8(4)(c)(ii) substituted (1.8.1998) by 1998 c. 8, s. 1(2)(a) (with s. 16(2)); S.I. 1998/1658, art. 2(1), Sch. 1

Modifications etc. (not altering text)

C11S. 8 with the omission of subsection (4)(c) extended (E.W.) (19.9.1995) by 1995 c. 25, ss. 63(5), 125(2), Sch. 7 para. 13(7) (with ss. 7(6), 115, 117, Sch. 8 para. 7)

S. 8 applied (8.5.2000) by 1999 c. 29, s. 67(6) (with Sch. 12 para. 9(1)); S.I. 2000/801, art. 2(2)(b), Sch. Pt. 2

8 Duty to adopt standing orders with respect to staff.S

(1)The Secretary of State may by regulations require relevant authorities, subject to such variations as may be authorised by the regulations—

(a)to incorporate such provision as may be prescribed by the regulations in standing orders relating to their staff; and

(b)to make or refrain from making such other modifications of any such standing orders as may be so prescribed.

(2)For the purposes of this section standing orders relate to the staff of a relevant authority if they make provision for regulating—

(a)the appointment of persons to paid office or employment under the authority; or

(b)the dismissal of persons holding such office or employment and the taking of other disciplinary action against such persons.

(3)Without prejudice to the generality of subsection (1) above, regulations under this section may require a relevant authority’s standing orders—

(a)so to restrict the manner of exercising the power to take steps for or towards the selection of candidates for interview, or for appointment, as to make it exercisable only by the authority themselves, by a committee or sub-committee of the authority or by particular officers of the authority;

(b)to restrict the power of the authority or any of their committees or sub-committees—

(i)to give directions to persons making appointments on their behalf as to the identity of the individuals to be appointed; or

(ii)otherwise to interfere with the making of appointments by such persons;

(c)to require the monitoring officer of the authority to prepare a report to the authority in respect of every proposed appointment of a person to a politically restricted post;

(d)to require every such report to state whether, in the opinion of the monitoring officer, the proposed appointment can be made—

(i)without any contravention of any provision made by or under this Part; and

(ii)without any matter being taken into account which could not properly be taken into account;

and, if in his opinion it cannot be so made, his reasons; and

(e)to prohibit the authority or any committee, sub-committee or other person acting on their behalf from dismissing or taking other disciplinary action against a person holding office or employment under the authority except in accordance with recommendations contained in a report made to the authority by an independent person of such a description as is prescribed by the regulations.

(4)Regulations under this section may contain such incidental provision and such supplemental, consequential and transitional provision in connection with their other provisions as the Secretary of State considers appropriate; and that provision may include—

(a)provision which, for the purposes of any such restriction as is mentioned in subsection (3) above, makes modifications of any enactment with respect to the delegation of a relevant authority’s functions;

(b)provision which (with or without modifications) applies provisions of section 5 above in relation to any report prepared in consequence of regulations made by virtue of subsection (3)(c) above;

(c)provision specifying the consequences—

(i)in relation to any appointment or contract of employment;

(ii)in relation to any proceedings on a complaint to an [F351employment tribunal]; and

(iii)in relation to any expenditure incurred by the authority,

of any contravention of standing orders made in pursuance of the regulations; and

(d)without prejudice to section 190(1) below, special provision in relation to the appointment of persons in pursuance of section 9 below and in relation to the appointment of persons for the purposes of functions exercised by joint committees on which relevant authorities are represented.

(5)In this section “relevant authority”—

(a)in relation to England and Wales, means a local authority of any of the descriptions specified in paragraphs (a) to (e) of section 21(1) below; and

(b)in relation to Scotland, means a [F352council constituted under section 2 of the Local Government etc. (Scotland) Act 1994].

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Extent Information

E3This version of this provision extends to Scotland only; a separate version has been created for England and Wales only

Amendments (Textual)

F351Words in s. 8(4)(c)(ii) substituted (1.8.1998) by 1998 c. 8, s. 1(2)(a) (with s. 16(2)); S.I. 1998/1658, art. 2(1), Sch. 1

Modifications etc. (not altering text)

9 Assistants for political groups.E+W+S

(1)Nothing in section 7(1) above or in any enactment, standing order or rule of law by virtue of which it is unlawful for a relevant authority or any committee or sub-committee of such an authority to have regard to any person’s political activities or affiliations in determining whether he should be appointed to any paid office or employment under the authority shall apply to the appointment of a person in pursuance of this section.

(2)An appointment is an appointment in pursuance of this section if—

(a)the appointment is made for the purpose of providing assistance, in the discharge of any of their functions as members of a relevant authority, to the members of any political group to which members of the authority belong;

(b)the terms of the appointment comply with subsection (3) below;

(c)the appointment is to one of not more than three posts which a relevant authority have decided to create for the purposes of this section; and

(d)each of those posts falls, under the standing orders of the authority, to be filled from time to time in accordance with the wishes of a political group to which the post has been allocated under those standing orders.

(3)The terms on which any person is appointed to or holds any appointment in pursuance of this section must be such as secure that the annual rate of remuneration for the post is less than the relevant amount and that the appointment terminates at or before the end of—

(a)in the case of a post under an authority in England and Wales, the day in the appropriate year on which the authority hold the meeting which they are required to hold in pursuance of paragraph 1 of Part I of Schedule 12 to the M38Local Government Act 1972 (annual meeting of principal councils); and

(b)in the case of a post under an authority in Scotland, the first day after the appointment on which a meeting is held in pursuance of the requirement under paragraph 1 of Schedule 7 to the M39Local Government (Scotland) Act 1973 that a meeting is held within twenty-one days from the date of an election.

(4)For the purposes of subsection (3) above the annual rate of remuneration for a post under a relevant authority is less than the relevant amount if the annual rate of remuneration in respect of the post—

(a)is less than £13,500 or such higher amount as the Secretary of State may by order made by statutory instrument specify; and

(b)where that post is a part time post, would be less than that amount if it were a full time post and carried remuneration at the same rate;

and a statutory instrument containing an order under this subsection shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(5)The standing orders of a relevant authority the members of which are divided into different political groups shall, for the purposes of subsection (2)(d) above—

(a)prohibit the making of an appointment to any post allocated to a political group until the authority have allocated a post to each of the groups which qualify for one;

(b)prohibit the allocation of a post to a political group which does not qualify for one; and

(c)prohibit the allocation of more than one post to any one political group.

(6)Subject to subsection (7) below, where the members of a relevant authority are divided into different political groups, a group shall qualify for a post if—

(a)the membership of that group comprises at least one-tenth of the membership of the authority;

(b)the number of the other groups (if any) which are larger than that group does not exceed two; and

(c)where the number of the other groups which are the same size as or larger than that group exceeds two, the authority have determined that that group should be a group to which a post is allocated;

and it shall be the duty of a relevant authority, before making any allocation for the purposes of this section in a case in which there are groups which would qualify for posts if paragraph (c) above were disregarded, to make such determinations under that paragraph as secure that there are no more nor less than three groups which do qualify for a post.

(7)Where the members of a relevant authority are divided into political groups only one of which has a membership that comprises one-tenth or more of the membership of the authority—

(a)the groups qualifying for a post shall be that group and one other group;and

(b)the other group shall be the one with the next largest membership or, in a case in which there is more than one group with the next largest membership, such one of those groups as may be determined by the authority;

and, in such a case, it shall be the duty of the authority to determine which of the groups with the next largest membership is to qualify for a post before making any allocation for the purposes of this section to the group with the largest membership.

(8)Neither a relevant authority nor any committee or sub-committee of a relevant authority shall exercise any power under—

(a)section 101 of the M40Local Government Act 1972 (delegation); or

(b)section 56 of [F35, or Schedule 10 or 20 to,] the M41Local Government (Scotland) Act 1973 (which makes corresponding provision for Scotland),[F36; or

(c)Part II of the Local Government Act 2000 (arrangements with respect to executives etc.) F37]

so as to arrange for the discharge of any of the authority’s functions by any person who holds a post under the authority to which he was appointed in pursuance of this section.

[F38(8A)Neither an executive, a committee of an executive or a member of an executive, of a relevant authority, shall exercise any power under—

(a)sections 14 to 18 of the Local Government Act 2000 (discharge of functions); or

(b)section 101(5) of the Local Government Act 1972 (arrangements for the discharge of functions by local authorities) F39,

so as to arrange for the discharge of any of the authority’s functions by any person who holds a post under the authority to which he was appointed in pursuance of this section.

(8B)An area committee of a relevant authority shall not exercise any power under arrangements made under regulations made under section 18 of the Local Government Act 2000 (discharge of functions by area committees) F40 so as to arrange for the discharge of any of the authority’s functions by any person who holds a post under the authority to which he was appointed in pursuance of this section.]

(9)No person holding any office or employment under a relevant authority shall be required to work under the direction of a person holding a post to which he was appointed in pursuance of this section except for the purpose of providing that person, or the political group to which his post is allocated, with secretarial or clerical services.

(10)Without prejudice to section 8 above, the Secretary of State may, for the purposes of this section and any standing orders relating to appointments in pursuance of this section, by regulations make provision—

(a)as to the circumstances in which the members of a relevant authority areto be treated as divided into different political groups;

(b)as to the persons who are to be treated as members of such a group and as to when a person is to be treated as having ceased to be a member of such a group;

(c)requiring the question whether a person is or is not a member of apolitical group to be determined in such manner as may be provided for by or under the regulations;

(d)requiring a relevant authority from time to time to review allocations made for the purposes of this section;

(e)specifying the manner in which, and times at which, the wishes of a political group are to be expressed and the consequences of a failure by such a group to express its wishes;

and regulations under this section may contain such incidental provision and such supplemental, consequential and transitional provision in connection with their other provisions as the Secretary of State considers appropriate.

(11)In this section—

  • appropriate year”, in relation to a post held by any person under a relevant authority, means—

(a)where the authority is one in relation to which provision for whole council elections has been made by virtue of section 7(4)(a) or 26(2)(a) of the M42Local Government Act 1972, the period of twelve months beginning with the first such election to be held after that person is appointed to that post; and

(b)in any other case, the period of twelve months beginning with the third anniversary of that person’s appointment to that post;

[F41“area committee” has the same meaning as in section 18 of the Local Government Act 2000;]

  • membership”, in relation to a relevant authority, means the number of persons who are for the time being members of the authority;

  • relevant authority”—

(a)in relation to England and Wales, means the council of any county, [F42county borough]district or London borough; and

(b)in relation to Scotland, means a [F43council constituted under section 2 of the Local Government etc. (Scotland) Act 1994].

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Amendments (Textual)

F36S. 9(8)(c) and the word preceding it inserted (E.) (11.7.2001) and (W.) (1.4.2002) by S.I. 2001/2237, arts. 1(2), 24(a); S.I. 2002/808, arts. 1(2), 23(a)

F37See, in particular, section 15(2) of that Act.

F38S. 9(8A)(8B) inserted (E.) (11.7.2001) and (W.) (1.4.2002) by S.I. 2001/2237, arts. 1(2), 24(b); S.I. 2002/808, arts. 1(2), 23(b)

F40See regulation 6 of the Local Authorities (Arrangements for the Discharge of Functions) (England) Regulations 2000, (S.I. 2000/2851).

F41S. 9(11): definition of "area committee" inserted (E.) (11.7.2001) and (W.) (1.4.2002) by S.I. 2001/2237, arts. 1(2), 24(c); S.I. 2002/808, arts. 1(2), 23(c)

F42S. 9(11): words in the definition of “relevant authority" para. (a) inserted (7.1.1997) by S.I. 1996/3071, art. 2, Sch. para. 3(1)

F43S. 9(11): words in the definition of “relevant authority" para. (b) substituted (S.) (1.4.1996) by 1994 c. 39, s. 180(1), Sch. 13 para. 161(1)(6)(b) (with s. 128(8)); S.I. 1996/323, art. 4(1)(c)

Modifications etc. (not altering text)

Marginal Citations

10 Limit on paid leave for local authority duties.E+W+S

(1)Notwithstanding anything in [F44section 50(4) of the Employment Rights Act 1996] (conditions of time off for public duties), where—

(a)a local authority permit an employee of theirs to take time off for the purpose of performing the duties of a member of a relevant council; and

(b)those duties do not include the duties of chairman of the council,

it shall be unlawful for the authority to make any payment of remuneration or other payment to that employee in respect of so much (if any)of any time off for that purpose as is in excess of two hundred and eight hours in any one financial year and is time off to which the employee would not be entitled apart from his membership of that council.

(2)In this section—

  • chairman”, in relation to a relevant council, includes any corresponding office the holder of which is referred to as mayor or Lord Mayor or by any other description;

  • employee” has the same meaning as in the [F45the Employment Rights Act 1996];

  • financial year” means the twelve months ending with 31st March; and

  • relevant council” means the council of any county, [F46county borough] district or London borough, the Common Council of the City of London, a parish orcommunity council or any council in Scotland which is a local authority for the purposes of [F47subsection (2) of section 50] of that Act (time off for public duties);

and subsection (3) of that section (meaning of duties of a member of a body) shall apply for the purposes of this section as it applies for the purposes of that section.

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Amendments (Textual)

F44Words in s. 10(1) substituted (22.8.1996) by 1996 c. 18, ss. 240, 243, Sch. 1 para. 44(a) (with ss. 191-195, 202)

F45S. 10(2): words in the definition of “employee" substituted (22.8.1996) by 1996 c. 18, ss. 240, 243, Sch. 1 para. 44(b)(i) (with ss. 191-195, 202)

F46S. 10(2): words in the definition of “relevant council" inserted (7.1.1997) by S.I. 1996/3071, art. 2, Sch. para. 3(2)

F47S. 10(2): words in the definition of “relevant council" substituted (22.8.1996) by 1996 c. 18, ss. 240, 243, Sch. 1 para. 44(b)(ii) (with ss. 191-195, 202)

Modifications etc. (not altering text)

C19S. 10 applied (S.) (temp. 6.4.1995 to 1.4.1996) by S.I. 1995/789, art. 2, Sch. entry 11

S. 10 extended (E.W.) (19.9.1995) by 1995 c. 25, ss. 63(5), 125(2), Sch. 7 para. 11(3) (with ss. 7(6), 115, 117, Sch. 8 para. 7)

11 Confidentiality of staff records.E+W+S

(1)Nothing in [F48section 17 of the M43Local Government Finance Act 1982 or] section 79 of the M44Local Government Act 1985 (public inspection of accounts etc.) or in section 101 or 106 of the M45Local Government (Scotland) Act 1973 (which makes corresponding provision for Scotland) shall entitle any person—

(a)to inspect so much of any document as contains personal information about a member of the relevant body’s staff; or

(b)to require any such information to be disclosed in answer to any question.

(2)Information shall be regarded as personal information about a member of the relevant body’s staff if it relates specifically to a particular individual and is available to that body for reasons connected with the fact—

(a)that that individual holds or has held any office or employment under that body; or

(b)that payments or other benefits in respect of any office or employment under any other person are or have been made or provided to that individual by that body.

(3)In this section—

  • document” includes accounts, books, deeds, contracts, bills, vouchers and receipts; and

  • relevant body” in relation to accounts which are required to be audited in accordance with [F49the Audit Commission Act 1998] or Part VII of the said Act of 1973, means the body whose accounts are required to be audited or, as the case may be, the Common Council of the City of London;

and references in this section to a payment made or benefit provided to an individual in respect of any office or employment include references to a payment made or benefit provided to him in respect of his ceasing to hold the office or employment.

(4)This section shall have effect only in relation to—

(a)the inspection of, or of documents relating to, accounts for periods beginning on or after 1st April 1990; and

(b)the disclosure of information in answer to questions about such accounts.

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Amendments (Textual)

F48Words in s. 11(1) repealed (E.W.) (11.9.1998) by 1998 c. 18, ss. 54(1)(3), 55(2), Sch. 3 para. 18(1)(a), Sch. 5

F49S. 11(3): words in definition of “relevant body" substituted (E.W.) (11.9.1998) by 1998 c. 18, ss. 54(1), 55(2), Sch. 3 para. 18(1)(b)

Modifications etc. (not altering text)

C20S. 11 applied (S.) (temp. 6.4.1995 to 1.4.1996) by S.I. 1995/789, art. 2, Sch. entry 11

Marginal Citations

M451973c. 65.

12 Conflict of interest in staff negotiations.E+W+S

(1)It shall be the duty of a local authority to secure that, so far as practicable, the interests of that authority in any negotiations with respect to the terms and conditions on which persons in local authority employment hold office or are employed are never represented, whether directly or indirectly by, or by persons who include—

(a)a person who is both a member of the authority and in such employment; or

(b)a person who is both a member of the authority and an official or employeeof a trade union whose members include persons in local authority employment.

(2)In this section—

  • [F50member”, in relation to a trade union consisting wholly or partly of, or of representatives of, constituent or affiliated organisations, includes a member of any of its constituent or affiliated trade unions;]

  • official” and “trade union” have the same meanings as in M46[F51the Trade Union and Labour Relations (Consolidation) Act 1992]

and a person shall be treated for the purposes of this section as in local authority employment if he holds any paid office or employment under a local authority or any such paid office or employment under any other person as, by virtue of section 80(1)(a) of the M47Local Government Act 1972 or section 31(1)(a) of the M48Local Government (Scotland) Act 1973, disqualifies him for membership of any authority.

(3)This section shall come into force at the expiry of the period of two months beginning on the day this Act is passed.

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Amendments (Textual)

F50Definition of 'member' in s. 12(2) substituted (16.10.1992) by Trade Union and Labour Relations (Consolidation) Act 1992 (c. 52), ss. 300(2), 302, Sch. 2 para. 39(2)

Modifications etc. (not altering text)

C21S. 12 applied (S.) (temp. 6.4.1995 to 1.4.1996) by S.I. 1995/789, art. 2, Sch. entry 11

S. 12 extended (E.W.) (19.9.1995) by 1995 c. 25, ss. 63(5), 125(2), Sch. 7 para. 13(8) (with ss. 7(6), 115, 117, Sch. 8 para. 7)

S. 12 applied (with modifications) by 1995 c. x, ss. 1(3), 44, Sch. Pt. I

Marginal Citations

Voting rights of members of certain committeesE+W+S

13 Voting rights of members of certain committees: England and Wales.E+W+S

(1)Subject to the following provisions of this section, a person who—

(a)is a member of a committee appointed under a power to which this section applies by a relevant authority and is not a member of that authority;

(b)is a member of a joint committee appointed under such a power by two or more relevant authorities and is not a member of any of those authorities; or

(c)is a member of a sub-committee appointed under such a power by such acommittee as is mentioned in paragraph (a) or (b) above and is not a member of the relevant authority, or one of the relevant authorities, which appointed that committee,

shall for all purposes be treated as a non-voting member of that committee, joint committee or, as the case may be, sub-committee.

(2)The powers to which this section applies are—

(a)the powers conferred on any relevant authority by subsection (1) of section 102 of the M49Local Government Act 1972 (ordinary committees, joint committees and sub-committees);

[F52(b)the powers exercisable by any relevant authority in accordance with any arrangements approved under paragraph 1 of Part II of Schedule 1 to the M50Education Act 1944, by virtue of any order under paragraph 3 of that Part of that Schedule or by virtue of paragraph 10 of that Part of that Schedule (education committees, joint education committees and education sub-committees);]

(c)the powers exercisable by any relevant authority for the purposes of section 2 of the M51Local Authority Social Services Act 1970 (social services committees) or by virtue of section 4 of that Act (joint social services committees and sub-committees).

(3)Nothing in subsection (1) above shall require a person to be treated as a non-voting member of a committee or sub-committee falling within subsection (4) below; but, except—

(a)in the case of a sub-committee appointed by a committee falling within paragraph (e) of that subsection; and

(b)in such cases as may be prescribed by regulations made by the Secretary of State,

a person who is a member of a sub-committee falling within that subsection shall for all purposes be treated as a non-voting member of that sub-committee unless he is a member of the committee which appointed the sub-committee.

(4)A committee or sub-committee falls within this subsection if it is—

[F53(a)a committee appointed for the purposes of section 2 or 3(4) of the M52Police Act 1964 (constitution of a committee of a relevant authority as a police authority);]

(b)a local fisheries committee for any sea fisheries district;

(c)a committee established in accordance with any regulations made by virtue of section 7 of the M53Superannuation Act 1972 (regulations making provision for the superannuation of persons employed in local government service etc.);

F54(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(e)a committee appointed under section 102(4) of the Local Government Act 1972 (appointment of advisory committees by local authorities);

(f)a committee constituted in accordance with [F55Part I of Schedule 33 to the Education Act 1996 (constitution of appeal committees for admission appeals etc.)];

(g)a committee established exclusively for the purpose of discharging such functions of a relevant authority as may be prescribed by regulations made by the Secretary of State;

(h)a sub-committee appointed by a committee falling within any of [F56paragraphs (b) to (g)] above or such a sub-committee as is so prescribed.

[F57(5)Nothing in this section shall prevent the appointment of a person who is not a member of a local education authority as a voting member of—

(a)any committee or sub-committee appointed by the local authority wholly or partly for the purpose of discharging any functions with respect to education conferred on them in their capacity as a local education authority,

(b)any joint committee appointed by two or more local authorities wholly or partly for the purpose of discharging any functions with respect to education conferred on them in their capacity as local education authorities, or

(c)any sub-committee appointed by any such committee or joint committee wholly or partly for the purpose of discharging any of that committee’s functions with respect to education,

where that appointment is required [F58either] by directions given by the Secretary of State under section 499 of the Education Act 1996 (power of Secretary of State to direct appointment of members of committees) [F59or pursuant to regulations under subsection (6) of that section].]

[F60(5A)Nothing in this section shall prevent the appointment of a council manager of a local authority, or one other officer of that local authority in his place, as a voting member of a joint committee, or a sub-committee of such a committee, where—

(a)that local authority have a mayor and council manager executive F61; and

(b)the joint committee or the sub-committee has been appointed for the purpose of discharging functions which, as respects that local authority, are the responsibility of that executive.]

[F62(6)The Secretary of State may, if it appears to him appropriate to do so inconsequence of the preceding provisions of this section, withdraw any approval given before the coming into force of this section in relation to any arrangements for the purposes of paragraph 1 of Part II of Schedule 1 to the said Act of 1944].

(7)Where a person is treated by virtue of this section as a non-voting member of any committee, joint committee or sub-committee, he shall not be entitled to vote at any meeting of the committee, joint committee or sub-committee on any question which falls to be decided at that meeting; and the reference insubsection (5) above to a voting member, in relation to any [F63committee, joint committee or sub-committee appointed for the purpose mentioned in that subsection] , is a reference to a person who is entitled to vote at any meeting of that committee orsub-committee on any question which falls to be decided at that meeting.

(8)In subsection (3) of section 102 of the M54Local Government Act 1972, the words from “but at least” onwards (which require at least two-thirds of certain committees to be members of the appointing authority or authorities) shall be omitted.

(9)In this section—

[F64“council manager”, “executive” and “mayor and council manager executive” have the same meaning as in Part II of the Local Government Act 2000 (arrangements with respect to executives etc.); and]

  • F65. . .. . .

  • relevant authority” means a local authority of any of the descriptions specified in [F66paragraphs (a) to (f) or (h) to (j)] of section 21(1) below or any parish or community council;

and references in this section to voting include references to making use of a casting vote.

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Amendments (Textual)

F53S. 13(4)(a) repealed (1.4.1995 (E.W.) otherwiseprosp.) by 1994 c. 29, s. 93, Sch. 9 Pt. I; S.I. 1994/3262, art. 4, Sch. (subject to art. 5)

F56Words in s. 13(4)(h) substituted (1.10.1994 for specified purposes otherwise 1.4.1995) by 1994 c. 29, ss. 43, 94(1), Sch. 4 para. 36(a); S.I. 1994/2025, art. 6; S.I. 1994/3262, art. 4, Sch. (subject to art. 5)

F60S. 13(5A) inserted (E.) (18.5.2001) and (W.) (1.4.2002) by S.I. 2001/1517, art. 6(1)(a); S.I. 2002/803, art. 6(1)(a)

F61See regulations 11 and 12 of the Local Authorities (Arrangements for the Discharge of Functions) (England) Regulations 2000 (S.I. 2000/2851) and the Local Authorities (Executive Arrangements) (Discharge of Functions) (Wales) Regulations 2001 (S.I. 2001/2287 (W.175)).

F64S. 13(9): definition inserted (E.) (18.5.2001) and (W.) (1.4.2002) by S.I. 2001/1517, art. 6(1)(b); S.I. 2002/803, art. 6(1)(b)

F65S. 13(9): the definition of “foundation governors" and the “and" immediately following it repealed (1.11.1996) by 1996 c. 56, ss. 582(1)(2), 583(2), Sch. 37 Pt. I para. 96(1)(5), Sch. 38 Pt. I (with ss. 1(4), 561, 562, Sch. 39 paras. 5, 6, 8, 30, 39)

F66S. 13(9): words in the definition of

relevant authority

substituted (1.10.1994 for specified purposes otherwise 1.4.1995) by 1994 c. 29, ss. 43, 94(1), Sch. 4 para. 36(a); S.I. 1994/2025, art. 6; S.I. 1994/3262, art. 4, Sch. (subject to art. 5)

Modifications etc. (not altering text)

Marginal Citations

14 Voting rights of members of certain committees: Scotland.E+W+S

(1)Subject to the following provisions of this section, a person who—

(a)is a member of a committee appointed under subsection (1) of section 57of the M55Local Government (Scotland) Act 1973 by a relevant authority and is not a member of that authority;

(b)is a member of a joint committee appointed under that subsection by two or more relevant authorities and is not a member of any of those authorities; or

(c)is a member of a sub-committee appointed under that subsection by such a committee as is mentioned in paragraph (a) or (b) above and is not a member of the relevant authority, or one of the relevant authorities, which appointed that committee,

shall for all purposes be treated as a non-voting member of that committee, joint committee or, as the case may be, sub-committee.

[F67(2)Subject to the following provisions of this section, a person who—

(a)is a member of an education committee appointed under section 124 of the Local Government (Scotland) Act 1973 by an education authority and is not amember of that authority;

(b)is a member of a joint committee appointed under paragraph 7 of Schedule 10 to that Act by two or more education authorities and is not a member of any of these authorities; or

(c)is a member of a sub-committee appointed under paragraph 8 of thatSchedule by an education committee or such a joint committee and is not a member of the education committee or, as the case may be, one of the education authorities which appointed the joint committee,

shall for all purposes be treated as a non-voting member of that committee, joint committee or, as the case may be, sub-committee.]

[F67(3)Subject to the following provisions of this section, a person who—

(a)is a member of a social work committee appointed under section 2 of the M56Social Work (Scotland) Act 1968 by a local authority for the purposes of that Act and is not a member of that authority;

(b)is a member of a joint committee appointed under paragraph 6 of Schedule 20 to the Local Government (Scotland) Act 1973 by two or more such authorities and is not a member of any of those authorities; or

(c)is a member of a sub-committee appointed under paragraph 7 of that Schedule by a social work committee or such a joint committee and is not a member of the social work committee or, as the case may be, one of the local authorities which appointed the joint committee,]

shall for all purposes be treated as a non-voting member of that committee, joint committee or, as the case may be, sub-committee.

(4)Nothing in [F68subsection (1)] above shall require a person to be treated as a non-voting member of a committee or sub-committee falling within subsection (5) below; but, except—

(a)in the case of a sub-committee appointed by a committee falling within paragraph (b) of that subsection; and

(b)in such cases as may be prescribed by regulations made by the Secretary of State,

a person who is a member of a sub-committee falling within that subsection shall for all purposes be treated as a non-voting member of that sub-committee unless he is a member of the committee which appointed the sub-committee.

(5)A committee or sub-committee falls within this subsection if it is—

(a)a committee established in accordance with any regulations made by virtue of section 7 of the M57Superannuation Act 1972 (regulations making provision for the superannuation of persons employed in local government service etc.);

(b)a committee appointed under section 57(4) of the M58Local Government (Scotland) Act 1973 (appointment of advisory committees by local authorities);

(c)a committee constituted in accordance with Schedule A1 to the M59Education (Scotland) Act 1980 (appeal committees for hearing placing and other appeals);

[F69(d)a Children’s Panel Advisory Committee formed under paragraph 3, or a joint advisory committee formed under paragraph 8, of Schedule 1 to the Children (Scotland) Act 1995;]

(e)a committee established exclusively for the purpose of discharging such functions of a relevant authority as may be prescribed by regulations made by the Secretary of State;

(f)a sub-committee appointed by a committee falling within any of paragraphs (a) to (e) above or such a sub-committee as is so prescribed.

[F70(6)Nothing in this section shall prevent the appointment as a voting member of—

(a)a committee such as is mentioned in subsection (1) of section 124 of the M60Local Government (Scotland) Act 1973 (committees appointed by education authority); or

(b)a joint committee of two or more authorities whose purposes include either of those mentioned in paragraphs (a) and (b) of that subsection; or

(c)any sub-committee of such a committee or joint committee,

of a person such as is mentioned in subsection (4) of the said section 124.]

(7)Where a person is treated by virtue of this section as a non-voting member of any committee, joint committee or sub-committee, he shall not be entitled to vote at any meeting of the committee, joint committee or sub-committee on any question which falls to be decided at that meeting; and the reference in subsection (6) above to a voting member, in relation to any such committee, joint committee or sub-committee as is mentioned in that subsection, is a reference to a person who is entitled to vote at any meeting of that committee, joint committee or sub-committee on any question which falls to be decided at that meeting.

(8)In the Local Government (Scotland) Act 1973—

(a)in section 57(3), the words from “but at least” onwards (which require at least two-thirds of certain committees to be members of the appointing authority or authorities);

[F71(aa)section 124(5);]

(b)in section 161(6), the words from “but at least” onwards (which make corresponding provision in relation to a social work committee);

(c)in Schedule 10, paragraph 11 (which requires at least half of a joint education committee to be members of the appointing authorities);

(d)in Schedule 20, paragraph 10 (which requires at least two-thirds of a joint social work committee to be members of the appointing authorities),

shall be omitted.

(9)In this section “relevant authority” means a [F72council constituted under section 2 of the Local Government etc. (Scotland) Act 1994]; and references in this section to voting include references to making use of a casting vote.

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Amendments (Textual)

Marginal Citations

Political balance on committees etc.E+W+S

15 Duty to allocate seats to political groups. E+W+S
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Modifications etc. (not altering text)

C23Ss. 15–17 applied with modifications by S.I. 1990/1553,regs. 21, 22

(1)It shall be the duty of a relevant authority having power from time to time to make appointments to a body to which this section applies to review the representation of different political groups on that body—

(a)where the members of the authority are divided into different political groups at the time when this section comes into force, as soon as practicable after that time;

(b)where the authority hold annual meetings in pursuance of paragraph 1 of Part I of Schedule 12 to the M61Local Government Act 1972 (annual meeting of principal councils) and the members of the authority are divided into different political groups at the time of any such meeting, at or as soon as practicable after the meeting;

(c)where, at the time of the meeting required by paragraph 1 of Schedule 7 to the M62Local Government (Scotland) Act 1973 to be held in an election year within twenty-one days of the election, the members of the authority are divided into different political groups, at or as soon as practicable after the meeting;

(d)as soon as practicable after any such division as is mentioned in paragraphs (a) to (c) above occurs; and

(e)at such other times as may be prescribed by regulations made by the Secretary of State.

(2)Except in such cases as may be prescribed by regulations made by the Secretary of State, it shall be the duty of every committee of a relevant authority which is a committee having power from time to time to make appointments to a body to which this section applies to review the representation of different political groups on that body—

(a)where the members of the authority are divided into different political groups at the time when this section comes into force, as soon as practicable after that time; and

(b)as soon as practicable after any occasion on which the members of the committee are changed in consequence of a determination under this section.

(3)Where at any time the representation of different political groups on a body to which this section applies falls to be reviewed under this section by any relevant authority or committee of a relevant authority, it shall be the duty of that authority or committee, as soon as practicable after the review, to determine the allocation to the different political groups into which the members of the authority are divided of all the seats which fall to be filled by appointments made from time to time by that authority or committee.

(4)Subject to subsection (6) below, it shall be the duty of a relevant authority or committee of a relevant authority—

(a)in performing their duty under subsection (3) above; and

(b)in exercising their power, at times not mentioned in subsection (3) above, to determine the allocation to different political groups of seats on a body to which this section applies,

to make only such determinations as give effect, so far as reasonably practicable, to the principles specified in subsection (5) below.

(5)The principles mentioned in subsection (4) above, in relation to the seats on any body which fall to be filled by appointments made by any relevant authority or committee of a relevant authority, are—

(a)that not all the seats on the body are allocated to the same political group;

(b)that the majority of the seats on the body is allocated to a particular political group if the number of persons belonging to that group is a majority of the authority’s membership;

(c)subject to paragraphs (a) and (b) above, that the number of seats on the ordinary committees of a relevant authority which are allocated to each political group bears the same proportion to the total of all the seats on the ordinary committees of that authority as is borne by the number of members of that group to the membership of the authority; and

(d)subject to paragraphs (a) to (c) above, that the number of the seats on the body which are allocated to each political group bears the same proportion to the number of all the seats on that body as is borne by the number of members of that group to the membership of the authority.

(6)Where any relevant authority or committee of a relevant authority are required, in determining the allocation to different political groups of seats on a body to which this section applies, to give effect to the principles specified in subsection (5) above—

(a)any seats which, in accordance—

(i)with provision made by virtue of subsection (5) of section 13 above; or

(ii)with subsection (6) of section 14 above,

are to be or may be filled by the appointment of persons who are not members of the authority shall be taken into account for the purpose of determining how many seats constitute a majority of the seats on a body mentioned in either of those subsections; but

(b)that authority or committee shall, in making that determination, disregard for all other purposes any seats which, in accordance with any such provision, the said subsection (6) or otherwise, are to be or may be so filled;

and for the purposes of this subsection a seat on an advisory committee of a relevant authority or on a sub-committee appointed by such an advisory committee shall not be treated as one which may be so filled unless the authority have determined that it must be so filled.

(7)Schedule 1 to this Act shall have effect for determining the bodies towhich this section applies and for the construction of this section andsections 16 and 17 below.

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Modifications etc. (not altering text)

C23Ss. 15–17 applied with modifications by S.I. 1990/1553,regs. 21, 22

C25S. 15 excluded (3.4.1995) by 1994 c. 19, ss. 30(11), 31(9) (with ss. 54(7), 55(7), Sch. 17 paras. 22(1), 23(2)); S.I. 1995/852, art. 5

S. 15 applied (with modifications) (8.5.2000) by 1999 c. 29, s. 57(1) (with Sch. 12 para. 9(1)); S.I. 2000/801, art. 2(2)(b), Sch. Pt. 2

S. 15 extended (E.W.) (26.11.2000 for E. and 28.7.2001 for W.) by 2000 c. 22 ss. 21(11)(b), 108(4); S.I. 2000/2849, art. 2(a)

S. 15 excluded (E.W.) (19.12.2000 for E. and police authorities in Wales otherwise 28.7.2001) by 2000 c. 22, ss. 53(10), 108(4); S.I. 2000/3335, art. 2

S. 15 applied (E.) (2.4.2001) by S.I. 2001/1299, reg. 6(10)(b)

S. 15 excluded (W.) (28.7.2001) by S.I. 2001/2283, reg. 12

S. 15 applied (W.) (28.7.2001) by S.I. 2001/2284, reg. 5(1)(b)

Marginal Citations

16 Duty to give effect to allocations. E+W+S
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Modifications etc. (not altering text)

C27Ss. 15–17 applied with modifications by S.I. 1990/1553,regs. 21, 22

(1)Where any relevant authority or any committee of a relevant authority have determined the allocation to different political groups of the seats on a body to which section 15 above applies, it shall be the duty of that authority or committee so to exercise their power to make appointments to that body as to give effect—

(a)as soon as practicable after the determination; and

(b)if a vacancy subsequently occurs on that body, as soon as practicable after the occurrence of the vacancy,

to such wishes about who is to be appointed to the seats on that body which are allocated to a particular political group as are expressed by that group.

(2)Where—

(a)any person has been appointed, otherwise than for a fixed term, to a body to which section 15 above applies; and

(b)that appointment was made, in pursuance of subsection (1) above, in accordance with the wishes of a political group,

then, so long as that person’s seat continues to be allocated to that group, the authority or committee which made the appointment shall act in accordance with the wishes of that group in determining whether and when to terminate the appointment.

(3)The proceedings of a body to which section 15 above applies shall not be invalidated by any defect by virtue of this section or that section in the appointment of any person to that body.

(4)This section applies in relation to an allocation of seats to different political groups whether or not that allocation is made in pursuance of any duty under section 15 above.

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Modifications etc. (not altering text)

C27Ss. 15–17 applied with modifications by S.I. 1990/1553,regs. 21, 22

C29S. 16 applied (with modifications) (8.5.2000) by 1999 c. 29, s. 57(1) (with Sch. 12 para. 9(1)); S.I. 2000/801, art. 2(2)(b), Sch. Pt. 2

17 Exceptions to and extensions of political balance requirements. E+W+S
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Modifications etc. (not altering text)

C30Ss. 15–17 applied with modifications by S.I. 1990/1553,regs. 21, 22

(1)Subject to subsection (2) below, sections 15 and 16 above shall not apply in relation to appointments by a relevant authority or committee of a relevant authority to any body in so far as different provision is made by arrangements approved by the authority or committee—

(a)in such manner as may be prescribed by regulations made by the Secretary of State; and

(b)without any member of the authority or committee voting against them.

(2)Arrangements approved under subsection (1) above in relation to any body shall not affect any duty imposed by virtue of section 15(1)(c), (d) or (e) or (2) above on a relevant authority or committee to review the representation of different political groups on that body; and, accordingly, such arrangements shall cease to have effect when any such duty arises.

(3)The Secretary of State may, for the purpose of securing what appears to him to be the appropriate representation of different political groups on any sub-committee falling within subsection (4) below, by regulations make such provision as he thinks fit.

(4)The sub-committees that fall within this subsection are those to which appointments may be made by bodies to which section 15 above applies but which are not themselves such bodies.

(5)Without prejudice to the generality of subsection (3) above, regulations under that subsection may contain provision applying, with or without modifications, any provision made by or under section 15 or 16 above, subsections (1) and (2) above or Schedule 1 to this Act.

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Modifications etc. (not altering text)

C30Ss. 15–17 applied with modifications by S.I. 1990/1553,regs. 21, 22

C31S. 17 applied (with modifications) (8.5.2000) by 1999 c. 29, s. 57(1) (with Sch. 12 para. 9(1)); S.I. 2000/801, art. 2(2)(b), Sch. Pt. 2

AllowancesE+W+S

18 Schemes for basic, attendance and special responsibility allowances forlocal authority members.E+W+S

(1)[F73Subject to subsection (1A),] the Secretary of State may by regulations authorise or require any such relevant authority as may be specified or described in the regulations to make a scheme providing for the payment of—

(a)a basic allowance for every member of the authority who is a councillor;

(b)an attendance allowance in relation to the carrying out by any such member of such duties as may be specified in or determined under the regulations; and

(c)a special responsibility allowance for any such member who has such special responsibilities in relation to the authority as may be so specified or determined.

[F74(1A)In relation to a district council, county council, county borough council or London borough council, subsection (1) above shall have effect with the omission of paragraph (b).]

(2)Regulations under this section may also authorise or require a scheme made by a relevant authority under the regulations to include provision for the payment to appointed members of allowances in respect of such losses of earnings and expenses as—

(a)are necessarily sustained or incurred in the carrying out, in connection with their membership of the authority or any committee or sub-committee of the authority, of duties specified in or determined under the regulations; and

(b)are not of a description in respect of which provision is made for an allowance under any of sections 174 to 176 of the Local Government Act 1972 or sections 46 to 48 of the Local Government (Scotland) Act 1973.

[F75(2A)Regulations under this section may authorise or require a scheme made by a district council, county council, county borough council or London borough council to include provision for the payment to members of the council of allowances in respect of such expenses of arranging for the care of children or dependants as are necessarily incurred in the carrying out of their duties as members.]

(3)Without prejudice to the generality of the powers conferred by subsections (1) [F76to (2A)] above, regulations under this section may contain such provision as the Secretary of State considers appropriate for requiring a scheme made by a relevant authority under the regulations—

(a)to make it a condition of any payment by way of allowance that, in the financial year to which the payment would relate, the aggregate amount which the authority has paid out or is already liable to pay out under the scheme does not exceed such maximum amount as may be specified in or determined under the regulations;

(b)to make provision for different maximum amounts to be applicable, for the purposes of any such condition, in relation to different allowances or in relation to different members or members of different groups;

(c)to make provision in relation to claims which cannot be paid by virtue of any such condition and provision for the payment to members of the authority who are councillors of an amount by way of supplement to the basic allowance where, in any financial year, the aggregate paid out or owing under the scheme is less than an amount specified in or determined under the regulations;

(d)to provide that the amount authorised by virtue of subsection (2) above to be paid by way of allowance in any case shall not exceed such amount as may be so specified or determined;

(e)to contain such provision as may be so specified or determined with respect to the general administration of the scheme, with respect to the manner in which, time within which and forms on which claims for any allowance are to be made and with respect to the information to be provided in support of any such claim;

(f)to contain such provision as may be so specified or determined for avoiding the duplication of payments or of allowances, for determining the bodies by which payments of allowances are to be made and for the apportionment of payments between different bodies.

[F77(3A)Regulations under this section may make provision for or in connection with—

(a)enabling district councils, county councils, county borough councils or London borough councils to determine which members of the council are to be entitled to pensions, allowances or gratuities,

(b)treating the basic allowance or the special responsibility allowance as amounts in respect of which such pensions, allowances or gratuities are payable.

F77(3B)Regulations under this section may make provision for or in connection with requiring a district council, county council, county borough council or London borough council to establish and maintain a panel which is to have such functions as may be specified in the regulations in relation to allowances, or pensions, allowances or gratuities, payable to members of the council.

F77(3C)Regulations under this section may make provision for or in connection with enabling a panel established by a body specified in the regulations to exercise such functions as may be specified in the regulations in relation to allowances, or pensions, allowances or gratuities, payable to members of such district councils, county councils or London borough councils in England as may be specified in the regulations.

F77(3D)Regulations under this section may make provision for or in connection with the establishment by the National Assembly for Wales on a permanent or temporary basis of a panel which is to have such functions as may be specified in the regulations in relation to allowances, or pensions, allowances or gratuities, payable to members of county councils and county borough councils in Wales.

F77(3E)Regulations under subsection (3B) above may include provision—

(a)with respect to the number of persons who may or must be appointed to the panel of a council,

(b)with respect to the persons who may or must be appointed to the panel of a council,

(c)for or in connection with the appointment by councils of joint panels.

F77(3F)Regulations under subsection (3C) may include provision—

(a)with respect to the number of persons who may or must be appointed to a panel mentioned in that subsection,

(b)with respect to the persons who may or must be appointed to such a panel.

F77(3G)Regulations under subsection (3B), (3C) or (3D) may include provision—

(a)for or in connection with enabling a panel mentioned in that subsection to make recommendations to a council on the level of allowances payable to members of the council,

(b)for or in connection with enabling such a panel to make recommendations to a council as to which members of the council are to be entitled to pensions, allowances or gratuities,

(c)which permits different recommendations to be made in relation to different councils or descriptions of council.]

(4)Regulations under this section may—

(a)prohibit the payment, otherwise than in accordance with sections 174 to176 of the Local Government Act 1972 or sections 46 to 48 of the Local Government (Scotland) Act 1973 or in such other cases as may be specified in the regulations, of any allowance to a member of a relevant authority who is a councillor or to any appointed member of a relevant authority;

(b)impose requirements on a relevant authority with respect to the publication, in the minutes of that authority or otherwise, of the details of amounts paid in pursuance of a scheme made under the regulations;

[F78(ba)make provision with respect to the amendment, revocation or replacement of a scheme made by a relevant authority under the regulations; and]

(c)contain such incidental provision and such supplemental, consequential and transitional provision in connection with the other provisions of the regulations as the Secretary of State considers appropriate.

(5)In this section “relevant authority” means—

(a)a local authority of any of the descriptions specified in any of the paragraphs of section 21(1) below, other than [F79paragraphs (d), (g) and (j)], or insection 21(2) below;

(b)any body on which a body which is a relevant authority by virtue of paragraph (a) above is represented and which is designated as a relevant authority for the purposes of this section by regulations made by the Secretary of State; or

(c)any appeal committee so designated which is constituted in accordance with [F80paragraph 2 or 3 of Schedule 33 to the Education Act 1996];

and references in this section to an appointed member, in relation to a relevant authority, are references to any person who is a member of the authority without being a councillor or who is a member of one or more of theauthority’s committees or sub-committees without being a member of the authority.

[F81(5A)In making or operating any scheme authorised or required by regulations under this section, a district council, county council, county borough council or London borough council shall have regard to any guidance for the time being issued by the Secretary of State.]

(6)In this section any reference to a councillor includes a reference to a member of the authority concerned who, in accordance with regulations under this section, is to be treated as if he were a councillor.

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Amendments (Textual)

F73Words in s. 18(1) inserted (E.W.) (28.7.2001) by 2000 c. 22, ss. 99(3)(4), 108(4)

F74S. 18(1A) inserted (E.W.) (28.7.2001) by 2000 c. 22, ss. 99(3)(4), 108(4)

F75S. 18(2A) inserted (E.W.) (19.2.2001 for E.and 28.7.2001 for W.) by 2000 c. 22, ss. 99(3)(5), 108(4); S.I. 2001/415, art. 2(b)

F76S. 18(3): words “to 2A" substituted for “and (2)" (E.W.) (19.2.2001 for E. and 28.7.2001 for W.) by 2000 c. 22, ss. 99(3)(6), 108(4); S.I. 2001/415, art. 2(b)

F77S. 18(3A)-(3G) inserted (E.W.) (19.2.2001 for E. and 28.7.2001 for W.) by 2000 c. 22, ss. 99(3)(7), 108(4); S.I. 2001/415, art. 2(b)

F78S. 18: subsection (4)(ba) substituted for the word “and" in subsection (4)(b) (E.W.) (19.2.2001 for E. and 28.7.2001 for W.) by 2000 c. 22, ss. 99(3)(8), 108(4); S.I. 2001/415, art. 2(b)

F79Words in s. 18(5)(a) substituted (1.10.1994 for specified purposes otherwise 1.4.1995) by 1994 c. 29, s. 43, Sch. 4 Pt. I para. 37; S.I. 1994/2025, art. 6; S.I. 1994/3262, art. 4, Sch. (subject to art. 5)

F81S. 18(5A) inserted (E.W.) (19.2.2001 for E. and 28.7.2001 for W.) by 2000 c. 22, ss. 99(3)(9), 108(4); S.I. 2001/415, art. 2(b)

Modifications etc. (not altering text)

C32S. 18 applied (with modifications) (S.) (temp. 6.4.1995 to 1.4.1996) by S.I. 1995/789, art. 2, Sch. entry 11

S. 18 extended (E.W.) (19.9.1995) by 1995 c. 25, ss. 63(5), 125(2), Sch. 7 para. 11(1) (with ss. 7(6), 115, 117, Sch. 8 para. 7)

S. 18 modified (E.W.) (19.9.1995) by 1995 c. 25, ss. 63(5), 125(2), Sch. 7 para. 11(2) (with ss. 7(6), 115, 117, Sch. 8 para. 7)

C34S. 18(1)(b) applied (with modifications) (8.1.1996) by 1995 c. x, ss. 1(3), 44, Sch. Pt. I

Members’ interestsE+W+S

19 Members’ interests.E+W+S

(1)The Secretary of State may by regulations require each member of a local authority—

(a)to give a general notice to the proper officer of the authority setting out such information about the member’s direct and indirect pecuniary interests as may be prescribed by the regulations, or stating that he has no such interests; and

(b)from time to time to give to that officer such further notices as may be so prescribed for the purpose of enabling that officer to keep the information provided under the regulations up to date.

(2)Any member of a local authority who—

(a)without reasonable excuse fails to comply with the requirements of any regulations under this section; or

(b)in giving a notice in compliance with any such requirement, provides information which he knows to be false or misleading in a material particular or recklessly provides information which is false or misleading in a material particular,

shall be guilty of an offence and liable, on summary conviction, to a fine not exceeding level 4 on the standard scale.

(3)Proceedings for an offence under subsection (2) above shall not be instituted in England and Wales except by or with the consent of the Director of Public Prosecutions.

(4)Neither section 96 of the M63Local Government Act 1972 (general notice of pecuniary interests) nor section 40 of the M64Local Government (Scotland) Act 1973 (corresponding provision for Scotland) shall apply in relation to any notice given in pursuance of any regulations under this section; but such regulations may provide—

(a)that the giving of a notice in pursuance of any such regulations shall be deemed to be sufficient disclosure for the purposes of section 94 of the said Act of 1972 (disability of members of authorities for voting on account of interest in contracts etc.) or for the purposes of section 38 of the said Act of 1973; and

(b)that the proper officer of a local authority is to maintain such records of the information contained in notices given to him as may be prescribed by the regulations and is to keep those records open to inspection by members of the public.

(5)A local authority shall not be entitled (whether by means of making it acondition of any appointment or by any other means whatever) to impose any obligations on their members to disclose any interests other than those that they are required to disclose by virtue of section 94 of the Local Government Act 1972, section 38 of the Local Government (Scotland) Act 1973 or any regulations under this section.

(6)Regulations under this section may contain such incidental provision and such supplemental, consequential and transitional provision in connection with their other provisions as the Secretary of State considers appropriate.

(7)References in this section to the indirect pecuniary interests of a member of a local authority shall include references to any such interests as, by virtue of any connection between that member or his spouse and any other person, would fall to be disclosed—

(a)in the case of a local authority in England and Wales, under section 94 of the Local Government Act 1972; or

(b)in the case of a local authority in Scotland, under section 38 of the Local Government (Scotland) Act 1973,

if the authority were proposing to enter into a contract with that other person.

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Modifications etc. (not altering text)

C38S. 19 applied (S.) (temp. 6.4.1995 to 1.4.1996) by S.I. 1995/789, art. 2, Sch. entry 11

S. 19 extended (E.W.) (19.9.1995) by 1995 c. 25, ss. 63(5), 125(2), Sch. 7 para. 10(2) (with ss. 7(6), 115, 117, Sch. 8 para. 7)

S. 19 applied (with modifications) (8.5.2000) by 1999 c. 29, s. 154(4), Sch. 10 para. 13(12) (with Sch. 12 para. 9(1)); S.I. 2000/801, art. 2(2)(b), Sch. Pt. 2

S. 19 excluded (E.) (27.11.2001,temp. until 27.11.2002) by S.I. 2001/3577, art. 3(1)(b)

S. 19 excluded (E.) (27.11.2001,temp. until 27.7.2002) by S.I. 2001/3376, art. 3(1)(c)

Commencement Information

I1S.19 wholly in force: s. 19 not in force at Royal Assent, see s. 195(2); s. 19 in force for certain purposes at 16.1.1990 by S.I. 1989/2445, art. 4 and in force at 8.5.1992 so far as not already in force by S.I. 1992/760, art. 2

Marginal Citations

Duty to adopt certain procedural standing ordersE+W+S

20 Duty to adopt certain procedural standing orders.E+W+S

(1)The Secretary of State may by regulations require relevant authorities, subject to such variations as may be authorised by the regulations—

(a)to incorporate such provision as may be prescribed by the regulations in standing orders for regulating their proceedings and business; and

(b)to make or refrain from making such other modifications of any such standing orders as may be so prescribed.

(2)Without prejudice to the generality of subsection (1) above, regulations under this section may require such standing orders as are mentioned in that subsection to contain provision which, notwithstanding any enactment or the decision of any relevant authority or committee or sub-committee of a relevant authority, authorises persons who are members of such an authority, committee or sub-committee—

(a)to requisition meetings of the authority or of any of their committees or sub-committees;

(b)to require a decision of a committee or sub-committee of the authority to be referred to and reviewed by the authority themselves or by a committee of the authority;

(c)to require that a vote with respect to a matter falling to be decided by the authority or by any of their committees or sub-committees is to be taken in a particular manner.

(3)Regulations under this section may contain such incidental provision and such supplemental, consequential and transitional provision in connection with their other provisions as the Secretary of State considers appropriate.

(4)In this section “relevant authority”—

(a)in relation to England and Wales, means a local authority of any of the descriptions specified in paragraphs (a) to (j) of section 21(1) below or any parish or community council; and

(b)in relation to Scotland, means a local authority.

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Modifications etc. (not altering text)

C39S. 20 applied (S.) (temp. 6.4.1995 to 1.4.1996) by S.I. 1995/789, art. 2, Sch. entry 11

S. 20 extended (E.W.) (19.9.1995) by 1995 c. 25, ss. 63(5), 125(2), Sch. 7 para. 12(3) (with ss. 7(6), 115, 117, Sch. 8 para. 7)

Interpretation of Part IE+W+S

21 Interpretation of Part I.E+W+S

(1)Any reference in this Part to a local authority is, in relation to England and Wales, a reference to a body of one of the following descriptions—

(a)a county council;

[F82(aa)a county borough council;]

(b)a district council;

(c)a London borough council;

(d)the Common Council of the City of London in its capacity as a local authority, police authority or port health authority;

(e)the Council of the Isles of Scilly;

(f)a fire authority constituted by a combination scheme under the M65Fire Services Act 1947;

[F83(g)a police authority established under [F84section 3 of the Police Act 1996][F85or the Metropolitan Police Authority];]

(h)an authority established under section 10 of the M66Local Government Act 1985 (waste disposal authorities);

(i)a joint authority established by Part IV of that Act ([F86police,] fire services, civil defence and transport) [F87or the London Fire and Emergency Planning Authority];

(j)any body established pursuant to an order under section 67 of that Act (successors to residuary bodies);

(k)the Broads Authority;

(l)any joint board the constituent members of which consist of any of the bodies specified above; [F88. . .]

F89(m). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .[F90and

F90(n)a joint planning board constituted for an area in Wales outside a National Park by an order under section 2(1B) of the M67Town and Country Planning Act 1990.]

(2)Any reference in this Part to a local authority is, in relation toScotland, a reference to a [F91council constituted under section 2 of the Local Government etc. (Scotland) Act 1994] or a joint board within the meaning of section 235(1) of the M68Local Government (Scotland) Act 1973.

(3)In this Part—

contravention” includes a failure to comply;

[F92“council manager”, “executive”, “executive arrangements” and “mayor and council manager executive” have the same meaning as in Part II of the Local Government Act 2000;]

  • modifications” includes additions, alterations and omissions;

  • proper officer”—

    (G)

    in relation to a local authority in England and Wales, has the same meaning as in the Local Government Act 1972; and

    (G)

    in relation to a local authority in Scotland, has the same meaning as in the Local Government (Scotland) Act 1973; and

  • subordinate legislation” has the same meaning as in the M69Interpretation Act 1978.

(4)References in this Part to an officer of a local authority or to a paid office under a local authority do not include references to, or to the office of, the chairman or vice-chairman of the authority (whether referred to as such, as mayor, Lord Mayor, deputy mayor, as Lord Provost or otherwise [F93or a member of any executive of the authority (other than a council manager)]).

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Amendments (Textual)

F83S. 21(1)(g) substituted (1.10.1994 for specified purposes otherwise 1.4.1995) by 1994 c. 29, s. 43, Sch. 4 Pt. I para. 38; S.I. 1994/2025, art. 6; S.I. 1994/3262, art. 4, Sch. (subject to art. 5)

F85Words in s. 21(1)(g) substituted (1.4.2002) by 2001 c. 16, s. 128(1), Sch. 6 Pt. II para. 50; S.I. 2002/344, art. 3 (with transitional provisions in art. 4)

F86Word in s. 21(1)(i) repealed (1.4.1995 (E.W.) otherwise (prosp.)) by 1994 c. 29, s. 93, Sch. 9 Pt. I; S.I. 1994/3262, art. 4, Sch. (subject to art. 5)

F88Word in s. 21(1)(l) omitted (E.W.) (23.11.1995) by virtue of 1995 c. 25, s. 78, Sch. 10 para. 31(1) (with ss. 7(6), 115, 117, Sch. 8 para. 7); S.I. 1995/2950, art. 2(1) and repealed (prosp.) by 1995 c. 25, ss. 120, 125(3), Sch. 24 (with ss. 7(6), 115, 117)

F90S. 21(1)(n) and the preceding “and" added (E.W.) (23.11.1995) by 1995 c. 25, s. 78, Sch. 10 para. 31(1) (with ss. 7(6), 115, 117, Sch. 8 para. 7); S.I. 1995/2950, art. 2(1)

F92S. 21(3): definition inserted (E.) (11.7.2001) and (W.) (1.4.2002) by S.I. 2001/2237, arts. 1(2), 25(a); S.I. 2002/808, arts. 1(2), 24(a)

F93Words in s. 21(4) inserted (E.) (11.7.2001) and (W.) (1.4.2002) by S.I. 2001/2237, arts. 1(2), 25(b); S.I. 2002/808, arts. 1(2), 24(b)

Modifications etc. (not altering text)

C40S. 21 applied (S.) (temp. 6.4.1995 to 1.4.1996) by S.I. 1995/789, art. 2, Sch. entry 11

Marginal Citations

M651947c. 41.

Part IIE+W+S Local Government Administration

22 Advisory Commissioners.E+W+S

(1)Section 23 of the M70Local Government Act 1974 (constitution and functions of Commissions for Local Administration) shall have effect with the amendments specified in subsections (2) to (4) below.

(2)In subsection (1), at the end, there shall be added the words “ but each of the Commissions may include persons appointed to act as advisers, not exceeding the number appointed to conduct investigations." ”

(3)In subsection (3), after the words “Parliamentary Commissioner” there shall be inserted the words “ or an advisory member" ”.

(4)In subsections (4), (5) and (6) the word “Local” shall be omitted.

(5)In Schedule 4 to the said Act, in paragraph 3 (remuneration), at the end there shall be inserted the following sub-paragraph–

(3)Sub-paragraphs (1) and (2) above apply in relation to Commissioners who are advisory members of the Commission as they apply in relation to Local Commissioners.

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Marginal Citations

23 Advice and guidance by Commissions for Local Administration and ScottishCommissioner.E+W+S

(1)In section 23 of the Local Government Act 1974 (appointment and functions of Commissions for Local Administration) there shall be inserted, after subsection (12), the following subsections—

(12A)Each of the Commissions may, after consultation with the representative persons and authorities concerned, provide to the authorities or any of the authorities to which this Part of this Act applies such advice and guidance about good administrative practice as appears to the Commission to be appropriate and may arrange for it to be published for the information of the public.

(12B)The representative persons and authorities concerned are—

(a)for the purposes of subsection (12) above, such persons appearing to the Commission to represent authorities in England or, as the case may be,authorities in Wales to which this Part of this Act applies, and in the case of such authorities as are not so represented, those authorities; and

(b)for the purposes of subsection (12A) above, such of those persons and authorities as the Commission think appropriate.

[F94(2)In section 21 of the M71Local Government (Scotland) Act 1975 (appointment and functions of Commissioner for Local Administration in Scotland) there shall be inserted, after subsection (4), the following subsection—

(4A)The Commissioner may, after consultation with such associations of local authorities as appear to him to be appropriate, provide to the authorities to which this Part of this Act applies such advice and guidance about good administrative practice as appears to him to be appropriate and may arrange for it to be published for the information of the public.]

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Amendments (Textual)

Marginal Citations

24 Expenses of Commissions for Local Administration.E+W+S

(1)The following provisions shall be substituted for paragraphs 6 to 11 of Schedule 4 to the Local Government Act 1974—

Expenses of the Commissions

6(1)Each of the Commissions shall be treated as if they were a specified body for the purposes of sections 78 and 79 (revenue support grant) of the Local Government Finance Act 1988 (“the 1988 Act”), and those sections shall accordingly have effect with the following modifications.

(2)Before making a determination under section 78 of the 1988 Act, the Secretary of State shall, except in the case mentioned in paragraph 8 below, take into account estimates of the expenses of each Commission together with any observations thereon made and submitted to him in accordance with paragraph 7 below.

(3)The Secretary of State may also take into account any other information available to him as to the expenses of the Commissions, whatever its source.

(4)A determination under section 78 of the 1988 Act shall not be invalid merely because the requirements of paragraph 7 below were not complied with.

(5)For the purposes of section 78(7) of the 1988 Act, each Commission shall be treated as if they were also a notifiable authority.

7(1)Each Commission shall prepare an estimate of the expenses which they will incur in the forthcoming financial year with a view to submitting it to the Secretary of State.

(2)Each Commission shall send copies of the estimate to such representatives of local government as the Secretary of State directs for consideration by those representatives.

(3)Any observations by those representatives shall be submitted to the Commission within one month of the receipt of the Commission’s estimate, and it shall be the duty of the Commission to take any such observations into consideration before submitting their estimate of their expenses to the Secretary of State.

(4)Each Commission shall, not later than such date in any year as the Secretary of State specifies in writing to the Commission, submit their estimate of their expenses for the forthcoming financial year to the Secretary of State together with copies of all observations made under this paragraph by the representatives of local government or, if none were made, together with a statement of that fact.

8Where a Commission fail to submit an estimate of their expenses for the forthcoming financial year under paragraph 7 above, the Secretary of State may, for the purposes of a determination under section 78 of the 1988 Act, assume those expenses to be such as he sees fit.

(2)Anything done before the passing of this Act which corresponds to a thing authorised or required to be done by any provision of the paragraphs 6(2) and (3), 7 and 8 substituted by subsection (1) above and done for the purposes ofsections 78 and 79 of the M72Local Government Finance Act 1988 shall be treated as validly done under that provision and those sections shall have effect accordingly.

(3)The foregoing provisions shall have effect for the financial years beginning on or after 1st April 1990.

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Marginal Citations

25 Annual reports of Commissions: new provisions.E+W+S

(1)The representative body for England and the representative body for Wales designated under section 24 of the M73Local Government Act 1974 are hereby dissolved and accordingly that section shall cease to have effect.

(2)After section 23 of that Act there shall be inserted the following section—

23A Annual reports for representatives etc.

(1)For the financial year ending in 1990 and for each subsequent financial year, each of the Commissions shall prepare a general report on the discharge of their functions and shall submit it—

(a)to such persons as appear to the Commission to represent authorities in England or, as the case may be, authorities in Wales to which this Part of this Act applies, and

(b)in the case of such authorities as are not so represented, to those authorities.

(2)The report shall be submitted as soon as may be after the Commission have received the reports for the year from Local Commissioners under section 23(11) above, and each Commission shall submit copies of those reports, together with their own report.

(3)Each Commission shall arrange for the publication of the report submitted by them under subsection (1) above and of the reports of which copies are submitted by them under subsection (2) above.

(4)Before arranging for the publication of a report under subsection (3) above the Commission concerned shall give a reasonable opportunity for the representative persons and authorities to whom the report was submitted to comment on it.

(5)Without prejudice to the generality of subsection (4) above, comments made by the representative persons and authorities by virtue of that subsection may relate to particular classes of authorities to which this Part of this Act applies.

(6)Where the Commission for Local Administration in Wales consist of only one Local Commissioner, section 23(11) above and subsection (2) above shall have effect with the necessary modifications.

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Marginal Citations

26 Implementation of recommendations of Commissioners for Local Administration in England and Wales.E+W+S

(1)In section 31 of the Local Government Act 1974 (action to be taken in relation to adverse reports), the following subsections shall be substituted for subsections (1) to (2A)—

(1)This section applies where a Local Commissioner reports that injustice has been caused to a person aggrieved in consequence of maladministration.

(2)The report shall be laid before the authority concerned and it shall be the duty of that authority to consider the report and, within the period of three months beginning with the date on which they received the report, or such longer period as the Local Commissioner may agree in writing, to notify the Local Commissioner of the action which the authority have taken or propose to take.

(2A)If the Local Commissioner—

(a)does not receive the notification required by subsection (2) above within the period allowed by or under that subsection, or

(b)is not satisfied with the action which the authority concerned have taken or propose to take, or

(c)does not within a period of three months beginning with the end of the period so allowed, or such longer period as the Local Commissioner may agree in writing, receive confirmation from the authority concerned that they have taken action, as proposed, to the satisfaction of the Local Commissioner,

he shall make a further report setting out those facts and making recommendations.

(2B)Those recommendations are such recommendations as the Local Commissioner thinks fit to make with respect to action which, in his opinion, the authority concerned should take to remedy the injustice to the person aggrieved and to prevent similar injustice being caused in the future.

(2C)Section 30 above, with any necessary modifications, and subsection (2)above shall apply to a report under subsection (2A) above as they apply to a report under that section.

(2D)If the Local Commissioner—

(a)does not receive the notification required by subsection (2) above as applied by subsection (2C) above within the period allowed by or under that subsection or is satisfied before the period allowed by that subsection has expired that the authority concerned have decided to take no action, or

(b)is not satisfied with the action which the authority concerned have taken or propose to take, or

(c)does not within a period of three months beginning with the end of the period allowed by or under subsection (2) above as applied by subsection (2C) above, or such longer period as the Local Commissioner may agree in writing, receive confirmation from the authority concerned that they have taken action,as proposed, to the satisfaction of the Local Commissioner,

he may, by notice to the authority, require them to arrange for a statement to be published in accordance with subsections (2E) and (2F) below.

(2E)The statement referred to in subsection (2D) above is a statement, in such form as the authority concerned and the Local Commissioner may agree,consisting of—

(a)details of any action recommended by the Local Commissioner in his furtherreport which the authority have not taken;

(b)such supporting material as the Local Commissioner may require; and

(c)if the authority so require, a statement of the reasons for their having taken no action on, or not the action recommended in, the report.

(2F)The requirements for the publication of the statement are that—

(a)publication shall be in any two editions within a fortnight of a newspaper circulating in the area of the authority agreed with the Local Commissioneror, in default of agreement, nominated by him; and

(b)publication in the first such edition shall be arranged for the earliest practicable date.

(2G)If the authority concerned—

(a)fail to arrange for the publication of the statement in accordance with subsections (2E) and (2F) above, or

(b)are unable, within the period of one month beginning with the date on which they received the notice under subsection (2D) above, or such longer period as the Local Commissioner may agree in writing, to agree with the Local Commissioner the form of the statement to be published,

the Local Commissioner shall arrange for such a statement as is mentioned in subsection (2E) above to be published in any two editions within a fortnight of a newspaper circulating within the authority’s area.

(2H)The authority concerned shall reimburse the Commission on demand any reasonable expenses incurred by the Local Commissioner in performing his duty under subsection (2G) above.

(2)This section shall not have effect in relation to a report made before the coming into force of this section.

[F9527 Implementation of recommendations of Commissioner for Local Administrationin Scotland.E+W+S

(1)In section 29 of the M74Local Government (Scotland) Act 1975 (action to be taken in relation to adverse reports), the following subsections shall be substituted for subsections (1) to (2A)—

(1)This section applies where the Commissioner reports that injustice has been caused to a person aggrieved in consequence of maladministration.

[F96(2)The report shall be laid before the authority concerned and it shall be the duty of that authority to consider the report and, within the period of three months beginning with the date on which they received the report, or such longer period as the Commissioner may agree in writing, to notify the Commissioner of the action which the authority have taken or propose to take.]

(2A)If the Commissioner—

(a)does not receive the notification required by subsection (2) above within the period allowed by or under that subsection, or

(b)is not satisfied with the action which the authority concerned have take nor propose to take, or

(c)does not within a period of three months beginning with the end of the period so allowed, or such longer period as the Commissioner may agree in writing, receive confirmation from the authority concerned that they have taken action, as proposed, to the satisfaction of the Commissioner,

he shall make a further report setting out those facts and making recommendations.

(2B)Those recommendations are such recommendations as the Commissioner thinks fit to make with respect to the action which, in his opinion, the authority concerned should take to remedy the injustice to the person aggrieved and to prevent similar injustice being caused in the future.

(2C)Section 28 of this Act, with any necessary modifications, and subsection (2) above shall apply to a report under subsection (2A) above as they apply to a report under that section.

(2D)If the Commissioner—

(a)does not receive the notification required by subsection (2) above as applied by subsection (2C) above within the period allowed by or under that subsection or is satisfied before the period allowed by that subsection has expired that the authority concerned have decided to take no action; or

(b)is not satisfied with the action which the authority concerned have taken or propose to take; or

(c)does not within a period of three months beginning with the end of the period allowed by or under subsection (2) above as applied by subsection (2C) above, or such longer period as the Commissioner may agree in writing, receive confirmation from the authority concerned that they have taken action, as proposed, to the satisfaction of the Commissioner,

he may, by notice to the authority, require them to arrange for astatement to be published in accordance with subsections (2E) and (2F) below.

(2E)The statement referred to in subsection (2D) above is a statement, in such form as the authority concerned and the Commissioner may agree, consisting of—

(a)details of any action recommended by the Commissioner in his further report which the authority have not taken;

(b)such supporting material as the Commissioner may require; and

(c)if the authority so require, a statement of the reasons for their having taken no action on, or not the action recommended in, the report.

(2F)The requirements for the publication of the statement are that—

(a)publication shall be in any two editions within a fortnight of a newspaper circulating in the area of the authority agreed with the Commissioner or, indefault of agreement, nominated by him; and

(b)publication in the first such edition shall be arranged for the earliest practicable date.

(2G)If the authority concerned—

(a)fail to arrange for the publication of the statement in accordance withsubsections (2E) and (2F) above, or

(b)are unable, within the period of one month beginning with the date on which they received the notice under subsection (2D) above, or such longer period as the Commissioner may agree in writing, to agree with the Commissioner the form of the statement to be published,

the Commissioner shall arrange for such a statement as is mentioned insubsection (2E) above to be published in any two editions within a fortnight of a newspaper circulating within the authority’s area.

(2H)The authority concerned shall reimburse the Commissioner on demand any reasonable expenses incurred by the Commissioner in performing his duty under subsection (2G) above.

(2)In section 32 of the M75Local Government (Scotland) Act 1975 (interpretation of provisions about investigations by the Commissioner) the following subsection shall be inserted after subsection (2)—

(2A)Except in the case of a joint board or joint committee, references in this Part of this Act to the authority concerned are, in relation to action taken by or on behalf of an authority to whom this Part of this Act applies (whether by virtue of subsection (1) or (2) of section 23 of this Act), references to that authority.

(3)This section shall not have effect in relation to a report made before the coming into force of this section.]

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Amendments (Textual)

F96S. 27(2) repealed (S.) (21.5.1997) by 1997 c. 35, ss. 10, 11(2), Sch.

Marginal Citations

28 Consideration of adverse reports: England and Wales.E+W+S

(1)The following section shall be inserted after section 31 of the M76Local Government Act 1974—

31A Consideration of adverse reports.

(1)Subject to subsection (3) below, any power of an authority to have their functions discharged by any person or body of persons acting for the authority shall, as respects the consideration of a further report of the Local Commissioner under section 31(2A) above, be subject to the restriction that, if it is proposed that the authority should take no action on, or not the action recommended in, the report, consideration of the report shall be referred to the authority.

(2)Consideration of a further report of the Local Commissioner under section 31(2A) above by any such committee of a local authority as is referred to in an enactment specified in section 101(9) of the Local Government Act 1972 or by any appeal committee constituted in accordance with paragraph 1 of Schedule 2 to the Education Act 1980 shall be subject to a corresponding restriction.

(3)The restriction imposed by subsections (1) and (2) above does not apply where the report recommends action to be taken by—

(a)a joint committee established under the said section 101, or

(b)any committee referred to in an enactment specified in paragraph (c), (d) or (h) of the said section 101(9).

(4)If an authority considering a further report of the Local Commissioner under section 31(2A) above take into consideration a report by a person or body with an interest in the Local Commissioner’s report, they shall not conclude their consideration of the Local Commissioner’s report without also having taken into consideration a report by a person or body with no interest in the Local Commissioner’s report.

(5)No member of an authority to which this Part of this Act applies or of a committee mentioned in subsection (2) or (3) above shall vote on any question with respect to a report or further report under this Part of this Act in which he is named and criticised by a Local Commissioner.

(6)Section 25(4) and (5) above do not apply to this section.

(2)This section shall not have effect in relation to a report made before the coming into force of section 26 above.

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Marginal Citations

M761974c. 7.

[F9729 Consideration of adverse reports: Scotland.E+W+S

(1)The following section shall be inserted after section 29 of the M77Local Government (Scotland) Act 1975—

29A Consideration of adverse reports.

(1)Subject to subsection (3) below, any power of an authority to have their functions discharged by any person or body of persons acting for the authority shall, as respects the consideration of a further report of the Commissioner under section 29(2A) of this Act, be subject to the restriction that, if it is proposed to take no action on, or not the action recommended in, there port, consideration of the report shall be referred to the authority.

(2)Consideration of a further report of the Commissioner under section 29(2A)of this Act by—

(a)any such committee as is mentioned in section 23(2) of this Act; or

(b)an education committee appointed under section 124 of the Act of 1973;

shall be subject to a corresponding restriction.

(3)The restriction imposed by subsections (1) and (2) above does not apply where the report recommends action to be taken by a joint committee—

(a)established under section 56 of the Act of 1973 or under paragraph 7 of Schedule 10 or paragraph 6 of Schedule 20 to that Act (local authority, education and social work joint committees); or

(b)referred to in paragraph (a), (b), or (e) of section 23(2) of this Act (fire, police and local government and teachers’ superannuation joint committees).

(4)If an authority considering a further report of the Commissioner under section 29(2A) of this Act take into consideration a report by a person or body with an interest in the Commissioner’s report, they shall not conclude their consideration of the Commissioner’s report without also having taken into consideration a report by a person or body with no interest in the Commissioner’s report.

(5)No member of an authority to which this Part of this Act applies or of a committee mentioned in subsection (2) or (3) above shall vote on any question with respect to a report or further report under this Part of this Act in which he is named and criticised by the Commissioner.

(2)This section shall not have effect in relation to a report made before the coming into force of section 27 above.]

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Amendments (Textual)

Marginal Citations

M771975c. 30.

30 Declaration of acceptance of office of councillor etc.E+W+S

(1)Before section 34 of the M78Local Government (Scotland) Act 1973 there shall be inserted the following section—

Acceptance of OfficeE+W+S

33A Declaration of acceptance of office of councillor.

(1)A person elected to office as a councillor of a local authority shall not, unless—

(a)he has made a declaration of acceptance of office in a form prescribed by an order made by the Secretary of State; and

(b)the declaration has within two months from the day of the election been delivered to the proper officer of the local authority,

act in the office except for the purpose of taking such a declaration.

(2)If such a declaration is not made and delivered to the proper officer within the appointed time, the office of the person elected shall at the expiration of that time become vacant.

(3)The declaration shall be made before either—

(a)two members of the local authority to which the declarant is elected; or

(b)the proper officer of the local authority; or

(c)the sheriff; or

(d)a justice of the peace.

(4)Any person before whom a declaration is authorised to be made under this section may take the declaration.

(2)In section 83 of the M79Local Government Act 1972 (declaration of acceptance of office) in subsection (1) and subsection (4), for the words “rules under section 42 above” there shall be substituted the words “ an order made by the Secretary of State ”.

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Marginal Citations

31 National Code of Local Government Conduct.E+W+S

(1)The Secretary of State, for the guidance of members of local authorities, may issue a code of recommended practice as regards the conduct of members of such authorities to be known as the National Code of Local Government Conduct.

(2)The Secretary of State may revise or withdraw a code issued under this section.

(3)The Secretary of State, before issuing, revising or withdrawing a code, shall consult—

(a)as respects England and Wales, such representatives of local government,and

(b)as respects Scotland, such associations of local authorities,

as appear to him to be appropriate.

(4)A code shall not be issued unless a draft of it has been laid before and approved by a resolution of each House of Parliament.

(5)Where the Secretary of State proposes to revise a code, he shall lay a draft of the proposed alterations before each House of Parliament and—

(a)he shall not make the revision until after the expiration of the period of 40 days beginning with the day on which the draft is laid (or, if copiesare laid before each House of Parliament on different days, with the later of those days); and

(b)if within that period either House resolves that the alterations be withdrawn, he shall not proceed with the proposed alterations (but without prejudice to the laying of a further draft).

(6)In reckoning any period of 40 days for the purposes of subsection (5) above no account shall be taken of any time during which Parliament is dissolved or prorogued or during which both Houses are adjourned for more than four days.

[F98(6A)Subsections (4) to (6) above do not apply to a code which applies only to Scotland and such a code shall not be issued unless a draft of it has been laid before and approved by a resolution of the Scottish Parliament.

F98(6B)Where the Scottish Ministers propose to revise such a code as is mentioned in subsection (6A), they shall lay a draft of the proposed alterations before the Scottish Parliament and–

(a)they shall not make the revision until after the expiration of the period of 40 days beginning with the day on which the draft is laid; and

(b)if within that period the Parliament resolves that the alterations be withdrawn, they shall not proceed with the proposed alterations (but without prejudice to the laying of a further draft).

F98(6C)In reckoning any period of 40 days for the purposes of subsection (6B) above no account shall be taken of any time during which the Parliament is dissolved or is in recess for more than 4 days.]

(7)The form of declaration of acceptance of office under section 83 of the M80Local Government Act 1972 or section 33A of the M81Local Government (Scotland) Act 1973 may include an undertaking by the declarant to be guided by the National Code of Local Government Conduct in the performance of his functions.

(8)In this section—

  • local authority” means—

(a)as respects England and Wales, a county council [F99a county borough council,], a district council, a London borough council, a parish council, a community council, the Common Council of the City of London or the Council of the Isles of Scilly;

(b)as respects Scotland, a [F100council constituted under section 2 of the Local Government etc. (Scotland) Act 1994] or a joint board or joint committee within the meaning of section 235(1) of the Local Government (Scotland) Act 1973; and

  • member”, in relation to a local authority, includes any person who, whether or not a member of the authority, is a member of a committee or sub-committee of the authority or of any joint committee of theirs.

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Amendments (Textual)

F99S. 31(8): words in para. (a) of the definition of “local authority" inserted (7.1.1997) by S.I. 1996/3071, art. 2, Sch. para. 3(4)

F100S. 31(8): words in para. (b) of the definition of

local authority

substituted (S.) (1.4.1996) by 1994 c. 39, s. 180(1), Sch. 13 para. 161(1)(9); S.I. 1996/323, art. 4(1)(c)

Modifications etc. (not altering text)

C41S. 31 applied (S.) (temp. 6.4.1995 to 1.4.1996) by S.I. 1995/789, art. 2, Sch. para. 11

S. 31 applied (temp. from 4.5.1995 to 31.3.1996) by S.I. 1995/1042, art. 4(1)

S. 31 extended (E.W.) (19.9.1995) by 1995 c. 25, ss. 63(5), 125(2), Sch. 7 para. 9 (with ss. 7(6), 115, 117, Sch. 8 para. 7)

S. 31 excluded (E.) (27.11.2001,temp. until 27.7.2002) by S.I. 2001/3576, art. 3(1)(c)

Marginal Citations

32 Anonymity in reports on investigations.E+W+S

(1)In section 30 of the M82 Local Government Act 1974 (reports on investigations by Local Commissioners)—

(a)in subsection (3) (report only to identify a person if the Local Commissioner thinks it necessary), after the words “shall not” there shall be inserted the words “, except where subsection (3A) below applies,”; and

(b)the following subsection shall be inserted after subsection (3)—

(3A)Where the Local Commissioner is of the opinion—

(a)that action constituting maladministration was taken which involved amember of the authority concerned, and

(b)that the member’s conduct constituted a breach of the National Code of Local Government Conduct,

then, unless the Local Commissioner is satisfied that it would be unjust to do so, the report shall name the member and give particulars of the breach.

(2)In section 28 of the M83Local Government (Scotland) Act 1975 (reports on investigations by Commissioner)—

(a)in subsection (3) (report only to identify a person if the Commissioner thinks it necessary), after the words “shall not” there shall be inserted the words “, except where subsection (3A) below applies,”; and

(b)the following subsection shall be inserted after subsection (3)—

(3A)Where the Commissioner is of the opinion—

(a)that action constituting maladministration was taken which involved a member of the authority concerned, and

(b)that the member’s conduct constituted a breach of the National Code of Local Government Conduct,

then, unless the Commissioner is satisfied that it would be unjust to do so, the report shall name the member and give particulars of the breach.

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Marginal Citations

Part IIIE+W+S Economic Development and Discretionary Expenditure by Local Authorities

F10133. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .E+W

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Amendments (Textual)

F10234. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .E+W

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Amendments (Textual)

F102S. 34 repealed (18.10.2000 for E. and 9.4.2001 for W.) by 2000 c. 22, s. 107, Sch. 5 para. 27, Sch. 6; S.I. 2000/2836, art. 2(b)(iv); S.I. 2001/1471, art. 2

F10335. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .E+W

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Amendments (Textual)

F103S. 35 repealed (18.10.2000 for E. and 9.4.2001) by 2000 c. 22, s. 107, Sch. 6; S.I. 2000/2836, art. 2(b)(iv); S.I. 2001/1471, art. 2

36 Amendments of existing power to incur discretionary expenditure.E+W+S

(1)Section 137 of the M84Local Government Act 1972 (power of local authorities to incur expenditure for certain purposes not otherwise authorised) shall be amended in accordance with subsections (2) to (8) below and, accordingly, after the coming into force of this section, shall have effect as set out in Schedule 2 to this Act.

(2)In subsection (1), after the words “in the interests of” there shall be inserted “ and will bring direct benefit to ”; after the words “incur any expenditure” there shall be inserted “ (a) ” and at the end there shall be added the words nor

(b)unless the direct benefit accruing to their area or any part of it or to all or some of the inhabitants of their area will be commensurate with the expenditure to be incurred.

(3)After subsection (1) there shall be inserted the following subsection—

(1A)In any case where—

(a)by virtue of paragraph (a) of subsection (1) above, a local authority are prohibited from incurring expenditure for a particular purpose, and

(b)the power or duty of the authority to incur expenditure for that purposeis in any respect limited or conditional (whether by being restricted to a particular group of persons or in any other way),

the prohibition in that paragraph shall extend to all expenditure to which that power or duty would apply if it were not subject to any limitationor condition.

(4)Subsections (2A) and (2B) (which relate to the giving of financial assistance to persons carrying on commercial or industrial undertakings) shall cease to have effect and, in subsection (2C), paragraph (a) (which relates to publicity on the promotion of the economic development of the authority’s area) shall also cease to have effect.

(5)In subsection (3) (contributions permitted to charitable and public service funds etc.),—

(a)for the words “as aforesaid” there shall be substituted “ to the following provisions of this section ”;

(b)in paragraph (b) after the words “public service” there shall beinserted “ (whether to the public at large or to any section of it) ”; and

(c)at the end of paragraph (c) there shall be added “ or by such a person or body as is referred to in section 83(3)(c) of the Local Government (Scotland) Act 1973 ”.

(6)In subsection (4) (expenditure not to exceed the product of a 2p rate) for the words following “not exceed” there shall be substituted the amount produced by multiplying—

(a)such sum as is for the time being appropriate to the authority under subsection (4AA) below, by

(b)the relevant population of the authority’s area;and subsection (8) (which relates to the computation of a 2p rate) shall cease to have effect.

(7)After subsection (4) there shall be inserted the following subsections—

(4AA)For the purposes of subsection (4)(a) above, except in so far as the Secretary of State by order specifies a different sum in relation to an authority of a particular description,—

(a)the sum appropriate to a county council or the council of a non-metropolitan district is £2.50;

(b)the sum appropriate to a metropolitan district council, a London borough council or the Common Council is £5.00; and

(c)the sum appropriate to a parish or community council is £3.50.

(4AB)For the purposes of subsection (4)(b) above the relevant population of a local authority’s area shall be determined in accordance with regulations made by the Secretary of State; and a statutory instrument containing such regulations shall be subject to annulment in pursuance of a resolution of theHouse of Commons.

(8)In subsection (4B) (amounts deductible in determining expenditure under the section) for paragraph (a) there shall be substituted the following paragraph—

(a)the amount of any expenditure which forms part of the authority’s gross expenditure for that year under this section and in respect of which any grant has been or is to be paid under any enactment by a Minister of the Crown, within the meaning of the Ministers of the Crown Act 1975 (whether or not the grant covers the whole of the expenditure).

(9)In section 83(3) of the M85Local Government (Scotland)Act 1973 (contributions permitted to charitable and public service funds etc.), at the end of paragraph (c) there shall be added “ or by such a person or body as is referred to in section 137(3)(c) of the Local Government Act 1972 ”.

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Marginal Citations

37 Conditions of provision of financial assistance.E+W

After section 137 of the M86Local Government Act 1972 there shall be inserted the following section—

137A Financial assistance to be conditional on provision of information.

(1)If in any financial year a local authority provides financial assistance—

(a)to a voluntary organisation, as defined in subsection (2D) of section 137above, or

(b)to a body or fund falling within subsection (3) of that section,

and the total amount so provided to that organisation, body or fund in that year equals or exceeds the relevant minimum, then, as a condition of the assistance, the authority shall require the organisation, body or fund, within the period of twelve months beginning on the date when the assistance is provided, to furnish to the authority a statement in writing of the use to which that amount has been put.

(2)In this section “financial assistance” means assistance by way of grant or loan or by entering into a guarantee to secure any money borrowed and, in relation to any financial assistance,—

(a)any reference to the amount of the assistance is a reference to the amount of money granted or lent by the local authority or borrowed in reliance on the local authority’s guarantee; and

(b)any reference to the date when the assistance is provided is a referenceto the date on which the grant or loan is made or, as the case may be, on which the guarantee is entered into.

(3)The relevant minimum referred to in subsection (1) above is £2,000 or such higher sum as the Secretary of State may by order specify.

(4)It shall be a sufficient compliance with a requirement imposed by virtue of subsection (1) above that there is furnished to the local authority concerned an annual report or accounts which contain the information required to be in the statement.

(5)A statement (or any report or accounts) provided to a local authority in pursuance of such a requirement shall be deposited with the proper officer of the authority.

(6)In this section “local authority” includes the Common Council.

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Marginal Citations

38 Information etc. on individuals’ rights.E+W

(1)Section 142 of the M87Local Government Act 1972 (provision of information, etc.) shall be amended as follows.

(2)There shall be inserted after subsection (2)—

(2A)A local authority may assist voluntary organisations to provide for individuals—

(a)information and advice concerning those individuals’ rights and obligations; and

(b)assistance, either by the making or receiving of communications or by providing representation to or before any person or body, in asserting those rights or fulfilling those obligations.

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Marginal Citations

F104Part IVE+W Revenue Accounts and Capital Finance of Local Authorities

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Amendments (Textual)

F104Pt. IV (ss. 39-66) excluded (4.10.1993) by S.I. 1993/2171, art. 5(3)

Modifications etc. (not altering text)

C42Pt. IV (ss. 39–66) modified by S.I. 1990/404, art. 3,S.I. 1990/419, art. 14(5)(7), S.I. 1990/719, arts. 2(1), 3(2), 4(1) and S.I.1990/720, arts. 2, 3, 4, 6

C43Pt. IV (ss. 39–66) amended by S.I. 1990/432, reg. 27

C44Pt. IV (ss. 39–66) modified by S.I. 1989/814, art. 7(as amended by S.I. 1990/778, art. 2, Sch. para. 7) and S.I. 1989/1359, art.7 (as amended by S.I. 1990/778, art. 2, Sch. para. 8)

C45Pt. IV (ss. 39–66) amended by Housing Act 1988 (c. 50,SIF 61), s. 74(6) (as amended by S.I. 1990/778, art. 2 Sch. para. 1) and s.104(5) (as amended by S.I. 1990/778, art. 2 Sch. para. 2)

C46Pt. IV (ss. 39–66) modified by S.I. 1990/1024, arts.8(1)(2), 11(2)

Pt. IV (ss. 39-66) modified (31.3.1994) by S.I. 1994/566, art. 5(4)

Pt. IV (ss. 39-66) modified (31.3.1994) by S.I. 1994/695, art. 5(3)

Pt. IV (ss. 39-66) applied (temp.) (4.5.1995) by S.I. 1995/1042, art. 4(1)

Pt. IV (ss. 39-66) applied (with modifications) (1.4.1996) by S.I. 1996/604, art. 3(2)

Pt. IV excluded (25.9.1995) by S.I. 1995/2248, art. 5(4)

Pt. IV (ss. 39-66) power to make provision about matters of the kind dealt with in this part conferred (1.9.1997) by 1997 c. 50 s. 44(1), Sch. 4 para. (j)(ii); S.I. 1997/1930, art. 2(1)(2)(m)

Pt. IV (ss. 39-66) (except ss. 53, 55) modified (3.7.2000) by 1999 c. 29, s. 118(1)(2) (with Sch. 12 para. 9(1)); S.I. 2000/801, art. 2, Sch. Pt. 3

Pt. IV (ss. 39-66) modified (1.4.1997) by 1999/319, reg. 160(1)(2)

C47Pt. IV (ss. 39-66) modified by S.I. 1991/548, art.3

C48Pt. IV (ss. 39-66) restricted (6.4.1992) by S.I. 1992/581, art. 5(4)

C49Pt. IV (ss. 39-66) modified (20.7.1993) by 1993 c. 28, s. 136(7)

Pt. IV (ss. 39-66) modified (1.4.1995) by S.I. 1995/849, arts. 1(2)(c), 13-18

C50Pt. IV (ss. 39-66) applied (with modifications) (W.) (1.9.2002) by S.I. 1995/849, arts. 14-18 (as amended by The Local Authorities (Companies) (Amendment) (Wales) Order 2002 (S.I. 2002/2118), arts. 1(2), 2)

IntroductoryE+W

39 Application of Part IV.E+W

(1)For financial years beginning on or after 1st April 1990, this Part has effect with respect to the finances of the following authorities (in this Part referred to as “local authorities”)—

(a)a county council;

[F105[F106(aa)]a county borough council;]

(b)a district council;

[F107(bb)the Greater London Authority;

(bc)a functional body, within the meaning of the Greater London Authority Act 1999;]

(c)a London borough council; [F108or]

(d)the Common Council of the City of London;

(e)the Council of the Isles of Scilly;

[F109(ea)the Greater London Magistrates’ Courts Authority;]

(f)an authority established under section 10 of the M88Local Government Act 1985 (waste disposal authorities);

(g)a joint authority established by Part IV of that Act ([F110police,]fire services, civil defence and transport);

F111(h). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F112(hh)a joint planning board constituted for an area in Wales outside a National Park by an order under section 2(1B) of the Town and Country Planning Act 1990;]

(i)the Broads Authority;

[F113(ia)a National Park authority;]

[F114(ib)a fire authority constituted by a combination scheme made under section 6 of the Fire Services Act 1947 in consequence of an order made under Part II of the Local Government Act 1992 or in consequence of the provisions of the Local Government (Wales) Act 1994;]

[F115(j)a police authority established under [F116section 3 of the Police Act 1996]]; M89

(ja)F117. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(k)any other body prescribed by regulations under subsection (3) below.

(2)The reference in subsection (1)(d) above to the Common Council of the City of London is a reference to that Council in their capacity as a local authority, a police authority or a port health authority.

(3)The Secretary of State may by regulations prescribe for the purposes of subsection (1)(k) above any body which is (or any class of bodies each of which is)—

(a)a levying body, within the meaning of section 74 of the M90Local Government Finance Act 1988;

(b)a body to which section 75 of that Act applies (bodies having power to issue special levies);

[F118(c)a body to which section 118 of that Act applies;

(d)a local precepting authority, as defined in section 69 of the Local Government Finance Act 1992; or

(e)the Receiver for the Metropolitan Police District.]

(4)Regulations under subsection (3) above may provide that, in relation to a body prescribed by the regulations, the following provisions of this Part shall have effect subject to such modifications as may be specified in the regulations.

(5)For the purposes of the application of this Part, the Secretary of State may by order make provision for treating things done by or to—

(a)a company which, in accordance with Part V of this Act, is under the control of a local authority, or

(b)a company which, in accordance with that Part, is for the time being subject to the influence of an authority, or

(c)a trust to which, by virtue of an order under section 72 below, the provisions of section 69 below are applicable, or

(d)a Passenger Transport Executive and any company which, in accordance with that Part, is either under the control or for the time being subject to the influence of such an Executive,

in such cases and to such extent as may be provided in the order as if they were done by or to the local authority specified or determined in accordance with the order; and, where an order so provides in relation to a local authority, that authority together with any companies and Executive concerned are in subsection (6) below referred to as members of a local authority group.

(6)Without prejudice to the generality of subsection (5) above, an order under that subsection—

(a)may provide for the application of the provisions of this Part to the members of a local authority group subject to such modifications as may be specified in the order;

(b)may make provision as to the way in which dealings between members of a local authority group and changes in the capitalisation or capital structure of any company in a local authority group are to be brought into account for the purposes of this Part; and

(c)may contain such incidental, supplementary and transitional provisions as the Secretary of State considers appropriate.

(7)The power to make an order under subsection (5) above—

(a)shall be exercisable by statutory instrument subject to annulment inpursuance of a resolution of either House of Parliament; and

(b)may make different provision in relation to different cases or descriptions of case.

(8)This Part has effect in place of the provisions of Part VIII of the M91Local Government, Planning and Land Act 1980.

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Amendments (Textual)

F106S. 39(1)(bb) renumbered as para. (aa) (8.5.2000 for certain purposes otherwise 3.7.2000) by 1999 c. 29, s. 111(1)(3) (with Sch. 12 para. 9(1)); S.I. 2000/801, art. 2, Sch. Pt. 2, 3

F107S. 39(1)(bb)(bc) inserted (8.5.2000 for certain purposes otherwise 3.7.2000) by 1999 c. 29, s. 111(1)(2) (with Sch. 12 para. 9(1)); S.I. 2000/801, art. 2, Sch. Pts. 2, 3

F108Word in s. 39(1)(c) inserted (8.5.2000 for certain purposes otherwise 3.7.2000) by 1999 c. 29, s. 111(1)(4) (with Sch. 12 para. 9(1)); S.I. 2000/801, art. 2, Sch. Pts. 2, 3

F110Word in s. 39(1)(g) repealed (1.4.1995) by 1994 c. 29, s. 93, Sch. 9 Pt. I; S.I. 1994/3262, art. 4, Sch. (subject to art. 5)

F114S. 39(1)(ib) substituted for para. (ia) (13.3.1996) by S.I. 1996/633, art. 2

F115S. 39(1)(j) substituted (1.4.1995) by 1994 c. 29, s. 30; S.I. 1994/3262, art. 4 Sch. (subject to art. 5)

F116Words in s. 39(1)(j) substituted (22.8.1996) by 1996 c. 16, ss. 103, 104(1), Sch. 7, Pt. I para. 1(2)(zd)

F117S. 39(1)(ja) repealed (1.4.2002) by 2001 c. 16, ss. 128(1), 137, Sch. 6 Pt. II para. 51, Sch. 7 Pt. V para. 1; S.I. 2002/344, art. 3 (with transitional provisions in art. 4)

Marginal Citations

40 Capital purposes.E+W

(1)References in this Part to expenditure for capital purposes shall be construed in accordance with this section.

(2)Subject to subsections (5) and (6) below, the following expenditure (relating to tangible assets) is expenditure for capital purposes, namely, expenditure on—

(a)the acquisition, reclamation, enhancement or laying out of land, exclusive of roads, buildings and other structures;

(b)the acquisition, construction, preparation, enhancement or replacement of roads, buildings and other structures; and

(c)the acquisition, installation or replacement of movable or immovable plant, machinery and apparatus and vehicles and vessels.

(3)For the purposes of subsection (2) above, “enhancement”, in relation to any asset, means the carrying out of works which are intended—

(a)to lengthen substantially the useful life of the asset; or

(b)to increase substantially the open market value of the asset; or

(c)to increase substantially the extent to which the asset can or will be used for the purposes of or in connection with the functions of the local authority concerned;

but expenditure on the enhancement of an asset shall not be regarded as expenditure for capital purposes unless it should be so regarded in accordance with proper practices.

(4)Subject to subsection (5) below, the following expenditure, in so far as it is not expenditure on approved investments, is expenditure for capital purposes, namely, expenditure on—

(a)the making of advances, grants or other financial assistance to any person towards expenditure incurred or to be incurred by him on the matters mentioned in paragraphs (a) to (c) of subsection (2) above or on the acquisition of investments; and

(b)the acquisition of share capital or loan capital in any body corporate.

(5)The Secretary of State may by regulations provide—

(a)that expenditure which, apart from the provision made by the regulations, would not be expenditure for capital purposes shall be such expenditure; or

(b)that expenditure which, apart from the provision made by the regulations, would be expenditure for capital purposes shall not be such expenditure.

(6)Notwithstanding anything in the preceding provisions of this section, if the Secretary of State so directs, expenditure which—

(a)is of a description or for a purpose specified in the direction, and

(b)has been or is to be incurred by a particular local authority, and

(c)does not exceed such amount as is specified in the direction, and

(d)was or will be incurred during a period specified in the direction,

may be treated by the authority concerned as expenditure for capital purposes.

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Modifications etc. (not altering text)

C51S. 40 applied (19.6.1997) by 1997 c. 25, ss. 72(1), 74(1)

Charge of expenditure to revenue accountsE+W

41 Expenditure to be charged to revenue account.E+W

(1)All expenditure incurred by a local authority, other than expenditure excluded by section 42 below, must be charged to a revenue account of the authority and unless, in accordance with proper practices (exclusive of this subsection), it is appropriate to charge some or all of any particular item of expenditure to a revenue account for an earlier or a later financial year, the expenditure shall be charged to a revenue account of the authority for the year in which it is incurred.

(2)In relation to a local authority, any reference to a revenue account is a reference to one of the following accounts for a financial year of the authority, namely—

(a)a revenue account which the authority are required to keep by virtue of any enactment;

(b)a revenue account which the authority are required to keep in order to comply with proper practices; or

(c)any other revenue account which the authority decide to keep in accordance with proper practices.

(3)The reference in subsection (1) above to expenditure incurred by a local authority in any financial year includes the following (whether or not giving rise to actual payments)—

(a)any amount which does not form part of the authority’s capital receipts and which is set aside for the year by the authority as provision to meet credit liabilities, otherwise than by virtue of any of subsections (2) to (4) of section 63 below; and

(b)any other amount which is set aside for the year by the authority as reasonably necessary for the purpose of providing for any liability or loss which is likely or certain to be incurred but is uncertain as to the amount or the date on which it will arise (or both);

and the reference in subsection (5) below to expenditure incurred by a local authority shall be construed in accordance with this subsection.

(4)Subsection (2) above has effect not only for the purposes of this Act but also for the purposes of—

(a)any enactment passed after or in the same Session as this Act; and

(b)any earlier enactment which is amended by this Act or by any such enactment as is referred to in paragraph (a) above.

(5)Nothing in this section or the following provisions of this Part shall permit an authority to charge to a revenue account which they are required to keep by virtue of Part VI of this Act or any other enactment any expenditure incurred by a local authority which could not otherwise be so charged.

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Modifications etc. (not altering text)

42 Expenditure excluded from section 41(1).E+W

(1)Expenditure falling within subsection (2) below is excluded from the obligation in section 41(1) above but, if it is consistent with proper practices and the authority so wish, any such expenditure may be charged to a revenue account of the authority for the financial year in which it isincurred or an earlier or later financial year.

(2)Subject to subsection (4) below, the expenditure referred to in subsection (1) above is as follows—

(a)expenditure arising from the discharge of any liability of the authority under a credit arrangement, other than an arrangement excluded by regulations under paragraph 11 of Schedule 3 to this Act;

(b)expenditure arising from the discharge of any liability of the authority in respect of money borrowed by the authority, other than a liability in respect of interest;

(c)expenditure which, in reliance on a credit approval, the authority have determined under section 56(1)(a) below is not to be chargeable to a revenue account of the authority;

(d)expenditure on making approved investments;

(e)expenditure consisting of the application or payment of capital receipts as mentioned in subsections (7) to (9) of section 59 below;

(f)expenditure which is met out of the usable part of capital receipts, in accordance with section 60(2) below;

(g)expenditure for capital purposes which the authority determine is, or is to be, reimbursed or met out of money provided, or to be provided, by anyother person, excluding grants from a Community institution [F119other than contributions from any of the Structural Funds];

(h)expenditure in respect of payments out of a superannuation fund which the authority are required to keep by virtue of the M92Superannuation Act 1972; and

(i)expenditure in respect of payments out of a trust fund which is held for charitable purposes and of which the authority are a trustee.

(3)A determination under subsection (2)(g) above may not be made later than 30th September in the financial year following that in which the expenditure in question is incurred.

(4)Regulations made by the Secretary of State may amend subsection (2)above—

(a)by adding a description of expenditure specified in the regulations to the expenditure falling within that subsection; or

(b)by removing a description of expenditure specified in the regulations from the expenditure falling within that subsection (whether the expenditure so specified was within that subsection as originally enacted or was added by virtue of this subsection).

(5)Where, by virtue of subsection (1) above, expenditure of any descriptionis excluded from the obligation in section 41(1) above, it shall also be excluded from any requirement arising under any enactment (including an enactment in Part VI of this Act) under which the expenditure is required to be charged to a revenue account or any particular revenue account; but if—

(a)an authority decide that expenditure of that description should be charged to a revenue account as mentioned in subsection (1) above, and

(b)under any such requirement that expenditure (apart from this subsection) would have to be charged to a particular revenue account,

that expenditure may be charged only to that revenue account.

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Amendments (Textual)

F119Words in s. 42(2)(g) inserted (1.4.2000) by S.I. 2000/589, art. 2(1)(2)

Modifications etc. (not altering text)

C55S. 42(2) modified by S.I. 1990/432, reg. 4

Marginal Citations

BorrowingE+W

43 Borrowing powers.E+W+S

(1)Subject to the following provisions of this Part, as part of the proper management of their affairs, a local authority may borrow money for any purpose relevant to their functions under any enactment.

(2)Except with the approval of the Secretary of State given with the consent of the Treasury, a local authority may not borrow money in any manner other than—

(a)by overdraft or short term from the Bank of England or from a body or partnership which, at the time the borrowing is undertaken, is [F120a deposit-taker];or

(b)from the National Debt Commissioners or from the Public Works Loan Commissioners; or

(c)by means of a loan instrument;

F121. . ..

(3)In the exercise of the powers conferred by paragraphs (a) to (c) of subsection (2) above, a local authority may not, without the consent of theTreasury, borrow from a lender outside the United Kingdom or otherwise than in sterling.

(4)Subject to any provision made by regulations under subsection (5) below, for the purposes of this Part, a loan instrument is any document which, directly or by reference to any other document,—

(a)contains an acknowledgment (by the borrower, the lender or both) that a loan has been made to the local authority concerned or that, in connection with the provision of funds to the authority, a payment or repayment is due from the authority; and

(b)states the dates on which the authority are to make payments or repayments; and

(c)states the amount of each of those payments or repayments or the method by which that amount is to be calculated; and

(d)specifies the means, if any, by which the rights or obligations under the instrument are transferable; and

(e)except in the case of an instrument which is transferable by delivery, specifies the name or description of the person to whom payments or repayments are due; and

(f)in the case of an instrument issued by two or more local authorities acting jointly, states what proportion of the payments or repayments due are the responsibility of each of the authorities concerned.

(5)With the consent of the Treasury, the Secretary of State may make regulations—

(a)regulating the terms of loan instruments and the manner of their issue, transfer or redemption;

(b)restricting the issue of instruments which are transferable by delivery;

(c)regulating the manner in which any payments or repayments are to be made to the holder of the instrument; and

(d)making provision for the custody and, where appropriate, eventual destruction of documents relating to loan instruments;

and any document which, at the time it comes into being, does not comply with any provision then made under paragraphs (a) to (c) above is not a loan instrument for the purposes of this Part.

(6)Any approval given by the Secretary of State under subsection (2) above and any consent given by the Treasury under subsection (3) above may be given generally or in a particular case or to authorities of a particular description or by reference to borrowing or securities of a particular description and may be given subject to conditions.

(7)In so far as any local authority have power under any private or local Act to borrow money (whether for general or specific purposes), any such power shall cease to have effect for financial years beginning on or after 1st April 1990.

(8)Subject to subsection (7) above, subsections (2) to (6) above apply to all borrowing powers for the time being available to a local authority under any enactment, whenever passed.

[F122(9)In this section—

(a)“deposit-taker” means—

(i)a person who has permission under Part 4 of the Financial Services and Markets Act 2000 to accept deposits, or

(ii)an EEA firm of the kind mentioned in paragraph 5(b) of Schedule 3 to that Act which has permission under paragraph 15 of that Schedule (as a result of qualifying for authorisation under paragraph 12(1) of that Schedule) to accept deposits; and

(b)“short-term”, in relation to borrowing, is to be read with section 45(6).

(10)Subsection (9)(a) must be read with—

(a)section 22 of the Financial Services and Markets Act 2000;

(b)any relevant order under that section; and

(c)Schedule 2 to that Act.]

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Amendments (Textual)

F120Words in s. 43(2)(a) substituted (1.12.2001) by S.I. 2001/3649, art. 318(2)

F121Words in s. 43(2) repealed (1.12.2001) by S.I. 2001/3649, art. 318(3)

Modifications etc. (not altering text)

C56S. 43 applied (with modifications) (temp. 4.5.1995 - 31.3.1996) by S.I. 1995/1041, art. 2, Sch. para. 1

S. 43 applied (with modifications) (temp. 23.11.1995 - 31.3.1996) by S.I. 1995/2803, arts. 2, 19(2), Sch. 7 Pt. II para. 1

44 Borrowing limits etc.E+W

(1)A local authority may not at any time borrow an amount which would cause the total of—

(a)the amount outstanding at that time by way of principal of money borrowed by the authority, and

(b)the aggregate cost (as determined below) at that time of the credit arrangements entered into by the authority, other than arrangements excluded by regulations under paragraph 11 of Schedule 3 to this Act,

to exceed the aggregate credit limit for the time being applicable to the authority by virtue of section 62 below.

(2)The Secretary of State may by regulations make provision, in the interests of prudent financial management, regulating borrowing by local authorities;and a local authority may not borrow to any extent or in any manner which would contravene any provision of the regulations.

(3)A local authority may not borrow any amount which would cause any limit for the time being determined by the authority under section 45 below to be exceeded.

(4)References in this section and sections 45 to 47 below to borrowing by an authority are references to borrowing not only under section 43 above but also under any other power for the time being available to the authority under any enactment, whenever passed.

(5)For the purposes of subsection (1) above, the temporary use by a local authority for a purpose other than that of the fund in question of money forming part of such a superannuation fund or trust fund as is referred to inparagraph (h) or paragraph (i) of subsection (2) of section 42 above shall be treated as borrowing.

(6)A person lending money to a local authority shall not be bound to enquire whether the authority have power to borrow the money and shall not be prejudiced by the absence of any such power.

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Modifications etc. (not altering text)

C58S. 44(6) excluded (4.5.1995) by S.I. 1995/1041, art. 2(1)

45 The authority’s own limits.E+W

(1)For the purposes of this Part, for each financial year every local authority shall determine—

(a)an amount of money (in this Part referred to as “the overall borrowing limit”) which is for the time being the maximum amount which the authority may have outstanding by way of borrowing;

(b)an amount of money (in this Part referred to as “the short-term borrowing limit”), being a part of the overall borrowing limit, which is for the time being the maximum amount which the authority may have outstanding by way of short term borrowing; and

(c)a limit on the proportion of the total amount of interest payable by the authority which is at a rate or rates which can be varied by the person to whom it is payable or which vary by reference to any external factors.

(2)Subject to subsection (3) below, the duty to determine the limits referredto in subsection (1) above shall be performed before the beginning of the financial year to which the limits are to relate.

(3)Where a local authority have determined a limit for a financial year under subsection (1) above, the authority may at any time (whether before or after the beginning of that year) vary that limit by making a new determination thereof.

(4)Section 101 of the M93Local Government Act 1972 (arrangements for discharge of functions of local authorities by committees, officers etc.) shall not apply to the duty to make a determination under subsection (1) above of any limit or to the power to vary a limit undersubsection (3) above.

(5)Without prejudice to subsection (4) above, in section 101(6) of the Local Government Act 1972 (which provides that certain functions, including borrowing, shall be discharged only by the authority) the words “or borrowing money” shall be omitted.

(6)For the purposes of subsection (1)(b) above, a local authority borrow money short term if the sum borrowed is repayable—

(a)without notice; or

(b)at less than twelve months notice; or

(c)within twelve months of the date of the borrowing.

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Modifications etc. (not altering text)

C59S. 45 applied (with modifications) (31.3.1995) by S.I. 1995/798, reg. 5

S. 45 applied (with modifications) (temp. 4.5.1995 - 31.3.1996) by S.I. 1995/1041, art. 2 Sch. para. 1

S. 45 applied (with modifications) (23.11.1995) by S.I. 1995/2803, arts. 2, 19(2), Sch. 7 Pt. II para. 2

C60S. 45(2) applied (with modifications) (13.3.1996) by S.I. 1996/633, art. 3

Marginal Citations

46 Register of loan instruments and certain existing loans.E+W

(1)Every local authority shall maintain a register giving particulars of all the loans in respect of which loan instruments are issued by or to the authority on or after 1st April 1990 and, if they think it appropriate, a local authority may appoint as a registrar for some or all of the purposes of such a register a person who is neither an officer nor any other employee of the authority.

(2)In the register required to be maintained by a local authority under this section, the authority shall, not later than 30th September 1990, enter particulars of all outstanding loans in respect of which any payment or repayment falls to be made by the authority (whether or not any loan instruments have been issued), other than those resulting from borrowing as mentioned in paragraph (a) or paragraph (b) of subsection (2) of section 43 above; and, for this purpose, an “outstanding loan” is one which was made before 1st April 1990 and in respect of which any payment or repayment falls to be made on or after that date.

(3)Subject to the following provisions of this section, a register required to be maintained under this section shall be in such form as the authority concerned consider appropriate; but that form must be such that the register is, or is capable of being reproduced, in legible form.

(4)A register maintained under this section shall contain, with respect to each loan of which particulars are required to be registered,—

(a)except in the case of a loan in respect of which there has been issued an instrument (whether or not being a loan instrument) transferable by delivery, the name or description, and the address, of the person to whom payments or repayments are due;

(b)the dates on which the payments or repayments are to be made; and

(c)the amount of each of those payments or repayments or the method by which that amount is to be calculated.

(5)A local authority may remove from a register maintained under this section particulars of any loan in respect of which no more payments or repayments fall to be made.

(6)With the consent of the Treasury, the Secretary of State may make regulations—

(a)generally with respect to the keeping of a register required to be maintained under this section;

(b)modifying all or any of the particulars specified in paragraphs (a) to (c) of subsection (4) above; and

(c)specifying additional particulars which are to be entered in a register maintained under this section.

(7)A copy of an entry in a register maintained under this section which is certified by a registrar of the register and purports to show particulars entered pursuant to subsection (4) or subsection (6) above shall be prima facie evidence of the matters specified in the entry.

(8)A certification by a registrar of a register maintained under this section of any instrument of transfer of a loan instrument is to be taken as are presentation by him to any person acting on the faith of the certification that there have been produced to the registrar such documents as on their face show a prima facie title to the loan instrument in the transferor named in the instrument of transfer; but such a certification shall not be taken as a representation that the transferor has any title to the loan instrument.

(9)If—

(a)the name of any person is, without sufficient cause, entered in or omitted from a register maintained under this section, or

(b)default is made or unnecessary delay takes place in making any entry required to be made in such a register,

the person aggrieved may apply to the High Court or a county court for rectification of the register.

(10)Where an application is made under subsection (9) above, the court—

(a)may refuse the application or order rectification of the register;

(b)may decide any question relating to the title of a person who is a party to the application to have his name entered in or omitted from the register; and

(c)generally may decide any question necessary or expedient to be decided for rectification of the register.

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Modifications etc. (not altering text)

C61S. 46 applied (with modifications) (temp. 4.5.1995 - 31.3.1996) by S.I. 1995/1041, art. 2, Sch. para. 3

S. 46 applied (with modifications) (23.11.1995) by S.I. 1995/2803, arts. 2, 19(2), Sch. 7 Pt. II para. 3

47 Security for money borrowed etc.E+W

(1)All money borrowed by a local authority (whether before or after the coming into force of this section), together with any interest thereon, shall be charged indifferently on all the revenues of the authority.

(2)Subject to subsection (3) below, all securities created by a local authority shall rank equally without any priority.

(3)Subsection (2) above does not affect any priority existing at, or any right to priority conferred by a security created before, 1st June 1934.

(4)If at any time any principal or interest due in respect of any borrowing by a local authority remains unpaid for a period of two months after demand in writing, then, subject to subsection (5) below, the person entitled to the sum due may, without prejudice to any other remedy, apply to any court having jurisdiction in respect of a claim for that sum for the appointment of a receiver; and, if it thinks fit, the court may appoint a receiver on such terms and with such powers as the court thinks fit.

(5)No application may be made under subsection (4) above unless the sum due in respect of the borrowing concerned amounts to not less than £5,000 or such other amount as may from time to time be prescribed for the purposes of this subsection by regulations made by the Secretary of State.

(6)The court to whom an application is made under subsection (4) above may confer upon the receiver any such powers of collecting, receiving and recovering the revenues of the local authority and of issuing levies and precepts and setting, collecting and recovering community charges as are possessed by the local authority.

(7)Except as provided by subsection (1) above, a local authority may not mortgage or charge any of their property as security for money borrowed or otherwise owing by them; and any security purporting to be given in contravention of this subsection shall be unenforceable.

Credit arrangementsE+W

48 Credit arrangements. E+W
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Modifications etc. (not altering text)

C62S. 48 excluded by S.I. 1990/432, reg. 6(1)(4)(7)

S. 48 excluded (1.2.1995) by S.I. 1995/101, reg. 2

(1)Subject to the following provisions of this section, a local authority shall be taken for the purposes of this Part to have entered into a credit arrangement—

(a)in any case where they become the lessees of any property (whether land or goods); and

(b)in any case (not falling within paragraph (a) above) where, under a single contract or two or more contracts taken together, it is estimated by the authority that the value of the consideration which the authority have still to give at the end of a relevant financial year for or in connection with the provision to the authority of any land, goods or services or any other kind of benefit is greater than the value of the consideration (if any) which the authority were still to receive immediately before the beginning of that financial year; and

(c)in any case where the authority enter into a transaction of a description for the time being prescribed for the purposes of this section by regulations made by the Secretary of State;

and, in any such case, the “credit arrangement” is the lease, the single contract or, as the case may be, the two or more contracts taken together.

(2)The estimate required to be made under paragraph (b) of subsection (1)above shall be made at the time the contract or, as the case may be, the later or last of the contracts constituting the credit arrangement is entered into;and the reference in that paragraph to a relevant financial year is a reference to a financial year which begins after the contract or, as the case may be, the first of the contracts constituting the arrangement was entered into.

(3)Subject to section 52 below, references in this Part, other than this section, to a credit arrangement do not apply to a credit arrangement which comes into being before 1st April 1990; and for the purpose of this Part acredit arrangement comes into being—

(a)where subsection (1)(a) above applies, at the time the local authority become the lessees;

(b)where subsection (1)(b) above applies, at the time the contract or, as the case may be, the later or latest of the contracts constituting the arrangement is entered into; and

(c)where subsection (1)(c) above applies, at the time the authority enter into the transaction concerned or such other time as may be specified in the regulations concerned.

(4)Where a contract constitutes, or two or more contracts taken together constitute, a credit arrangement, no account shall be taken under this section of any later contract which has the effect of varying the effect of the contract or, as the case may be, of the two or more contracts taken together.

(5)A contract is not a credit arrangement to the extent that it is a contract under which a local authority borrows money; and a lease or contract which is excluded from this section by regulations made by the Secretary of State is not a credit arrangement.

(6)It is immaterial for the purposes of this section whether the consideration given or received by a local authority under any contract is given to or received from the person by whom the land, goods, services or other benefit are in fact provided to the authority; and for the purposes of this section, and any of the following provisions of this Part relating to credit arrangements, in any case where the consideration under a contract consists, in whole or in part,—

(a)of an undertaking to do or to refrain from doing something at a future time (whether specified or not), or

(b)of a right to do or to refrain from doing something at such a future time,

that consideration shall be regarded as neither given nor received until the undertaking is performed or, as the case may be, the right is exercised.

(7)Where the consideration under a contract consists, in whole or in part,of an option, the estimate required to be made under subsection (1)(b) above shall be made—

(a)on the assumption that the option will be exercised or, if the option could be exercised in different ways, on the assumption that it will be exercised in each of those ways, and

(b)on the assumption that the option will not be exercised,

and if, on any of those assumptions, the contract would on those estimates constitute, alone or together with one or more other contracts, a credit arrangement, it shall be regarded as doing so regardless of whether the option is or is not in fact exercised; and in this subsection “option” includes any right which is exercisable or not at the discretion of a party to the contract.

(8)If an existing contract is varied and the variation does not in law itself constitute a contract, it shall be regarded as such for the purposes of this section and, accordingly, subject to subsection (4) above, the existing contract and the variation shall be regarded as two contracts to be taken together.

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Modifications etc. (not altering text)

C62S. 48 excluded by S.I. 1990/432, reg. 6(1)(4)(7)

S. 48 excluded (1.2.1995) by S.I. 1995/101, reg. 2

49 Initial and subsequent cost of credit arrangements.E+W

(1)Subject to subsection (3) and section 52 below, for the purposes of this Part the initial cost of a credit arrangement is the amount which, at the time the arrangement comes into being, the local authority estimate will be the aggregate of—

(a)any consideration which falls to be given by the authority under the arrangement in the financial year in which it comes into being; and

(b)the value of the consideration falling to be given by the authority under the arrangement in any subsequent financial year, determined in accordance with subsection (2) below.

(2)For each subsequent financial year referred to in subsection (1)(b) above,the value of the consideration falling to be given in that year shall be determined by the formula—

where—

  • “x” is the amount of the consideration which the authority estimate will be given by them under the arrangement in that financial year;

  • “r” is the percentage rate of discount prescribed for the financial year in which the arrangement came into being by regulations made by the Secretary of State for the purposes of this section; and

  • “n” is the financial year in which the consideration falls to be given expressed as a year subsequent to the financial year in which the arrangement came into being (so that the first of the subsequent financial years is 1, the next financial year is 2, and so on).

(3)Subsection (2) above does not apply to a credit arrangement of a description excluded from that subsection by regulations made by the Secretary of State; and, in relation to a credit arrangement which is so excluded, regulations so made shall make provision for the method of calculating the initial cost and the cost of the arrangement at any time.

(4)Subject to subsection (3) above and sections 51 and 52 below, the cost of a credit arrangement at any time after it has come into being shall be determined in accordance with subsections (1) and (2) above (in like manner as the determination of the initial cost) but on the basis of an estimate made at the time in question and leaving out of account any consideration which has been given by the authority under the arrangement before that time.

(5)In the application of this section to a credit arrangement which consists, in whole or in part, of a contract, the consideration under which falls within subsection (7) of section 48 above,—

(a)if the credit arrangement exists only on the basis of one of the assumptions in that subsection, the local authority shall make that assumption for the purposes of this section; and

(b)if the credit arrangement would exist on the basis of any two or more of those assumptions, the authority shall for the purposes of this section make whichever of those assumptions seems to them most likely.

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Modifications etc. (not altering text)

50 Limits on powers to enter into credit arrangements.E+W

(1)A local authority may not enter into a credit arrangement for any purpose unless, if they incurred expenditure for that purpose, it would be expenditure for capital purposes, and any reference in the following provisions of this Part to “capital purposes”, in relation to a credit arrangement, shall be construed accordingly.

(2)A local authority may not enter into a credit arrangement unless, at the time the arrangement comes into being, there is available to the authority an amount of credit cover equal to the initial cost of the arrangement.

(3)For the purposes of this section, each of the following amounts constitutes, in relation to a credit arrangement, an amount of credit cover available to a local authority,—

(a)an amount for the time being authorised by a credit approval issued to the authority;

(b)an amount of the usable part of capital receipts which, in accordance witha determination under section 60(2) below referring to the arrangement, is applied by the authority as provision to meet credit liabilities; and

(c)an amount which, in accordance with a determination of the authority referring to the arrangement, is set aside from a revenue account by the authority as provision to meet credit liabilities (being an amount over and above what they are required so to set aside by virtue of any other provision of this Part).

(4)A local authority may not enter into a credit arrangement at any time if to do so would at that time cause the total referred to in section 44(1) above to exceed the aggregate credit limit for the time being applicable to the authority by virtue of section 62 below.

(5)A determination under subsection (3)(c) above may not be made later than 30th September in the financial year following that in which falls the time when there comes into being the credit arrangement for which the credit cover is made available.

(6)Except in so far as they are applied by section 52 below, the preceding provisions of this section do not apply in relation to a transitional credit arrangement.

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Modifications etc. (not altering text)

51 Variation of credit arrangements.E+W

(1)This section (other than subsection (10) below) applies where the terms of a credit arrangement entered into by a local authority are varied (whether by the making of a new contract or otherwise) in such a way that, if the effect of the variation had been part of the arrangement at the time it came into being, the initial cost would have been greater than it was.

(2)If, in the case of a credit arrangement falling within subsection (5) of section 49 above,—

(a)the option in question is exercised in a way different from that which was assumed for the purposes of that section, or

(b)it was assumed for the purposes of that section that the option in question would not be exercised but it is in fact exercised,

the exercise of the option shall be regarded for the purposes of this section as a variation of the terms of the credit arrangement; and if, in such a case, it was assumed for the purposes of section 49 above that the option would be exercised (or would be exercised in a particular way) and it subsequently appears to the local authority that it will not in fact be exercised, the option shall be assumed to have been abandoned and that abandonment shall be regarded for the purposes of this section as a variation of the terms of the credit arrangement.

(3)A local authority may not at any time agree to such a variation as is mentioned in subsection (1) above if to do so would mean that, immediately after the variation, the total referred to in section 44(1) above would exceed the aggregate credit limit for the time being applicable to the authority by virtue of section 62 below.

(4)Where a credit arrangement is varied as mentioned in subsection (1) above,the local authority shall secure that there is available to it an amount of credit cover equal to whichever is the less of—

(a)the difference between the total amount of consideration paid and payable under the arrangement, disregarding the variation, and the total amount of the consideration paid and payable under the arrangement as varied; and

(b)the difference between the adjusted cost of the arrangement and the credit cover already made available in connection with the arrangement in accordance with section 50 above;

and subsections (3) and (5) of section 50 above apply for the purposes of this section as they apply for the purposes of that section, except that,in subsection (5), the reference to the time when the arrangement comes into being shall be construed as a reference to the time when it is varied.

(5)Subject to subsection (7) below, the adjusted cost of the arrangement referred to in subsection (4)(b) above is the aggregate of—

(a)the consideration which, in the financial year in which the arrangement is varied and in any earlier financial year, has been or falls to be given by the local authority; and

(b)the amount which, at the time of the variation, the authority estimate will be the cost of the arrangement, as varied, in each subsequent financial year determined as follows.

(6)Subject to subsection (7) below, for any subsequent financial year the cost of the arrangement as varied shall be determined by the formula in section 49(2) above but, for this purpose,—

  • x” is the amount of the consideration which the authority estimate will be given by them in that financial year under the arrangement as varied;

  • r” is the percentage rate of discount for the financial year in which the arrangement is varied, as prescribed by regulations made by the Secretary of State for the purposes of section 49 above;

  • n” is the financial year in which the consideration falls to be given, expressed as a year subsequent to the financial year in which the arrangement is varied (so that the first of the subsequent financial years is 1, the next is 2, and so on).

(7)Subsections (5) and (6) above do not apply in relation to a credit arrangement as to which the method of calculating the initial cost and the cost at any time is provided for by regulations under section 49(3) above; and any adjusted cost or cost which would otherwise fall to be determined in accordance with those subsections shall be determined in accordance with provisions made by the regulations.

(8)Where a credit arrangement is varied as mentioned in subsection (1) above, the cost of the arrangement at any time after the variation shall be determined in accordance with subsections (5) and (6) above (in like manner as the determination of the adjusted cost) but on the basis of an estimate made at the time in question and leaving out of account any consideration which has been given by the authority under the arrangement before that time.

(9)If, at any time after the terms of a credit arrangement have been varied as mentioned in subsection (1) above, the terms of the arrangement are again varied, the preceding provisions of this section shall have effect with any necessary modifications and, in particular, as if,—

(a)the reference in subsection (1) above to the time the arrangement came into being were a reference to the time at which the arrangement was varied (or, as the case may be, last varied) as mentioned in that subsection;

(b)the reference in that subsection to the initial cost were a reference to the adjusted cost of the arrangement as so varied (or last varied); and

(c)the reference in paragraph (b) of subsection (4) above to the credit cover already made available in accordance with section 50 above included a reference to any additional credit cover made available under that subsection at the time of an earlier variation.

(10)If at any time the terms of a credit arrangement are varied otherwise than as mentioned in subsection (1) above, then, so far as the variation affects the consideration falling to be paid by the local authority in any year, account shall be taken of the variation in determining the cost of the arrangement at any subsequent time (under subsection (8) above or subsection (3) or subsection (4) of section 49 above) but for other purposes the variation shall be disregarded.

52 Transitional credit arrangements.E+W

(1)Subject to the following provisions of this section, a local authority shall be taken to have entered into a transitional credit arrangement if, applying the rules in section 48(3) above, the arrangement came into being on or after 7th July 1988 and before 1st April 1990; and, except in so far as any provision of this Part otherwise provides, any reference in this Part to a credit arrangement includes a reference to a transitional credit arrangement.

(2)Notwithstanding that a credit arrangement came into being as mentioned in subsection (1) above it is not a transitional credit arrangement if—

(a)under the arrangement the local authority concerned became the lessees of any property (whether land or goods) and the arrangement was a credit arrangement by reason only of section 48(1)(a) above; or

(b)by virtue of subsection (11) or subsection (12) of section 80 of the M94Local Government, Planning and Land Act 1980 (valuation etc.) the amount of prescribed expenditure which the authority is to be taken as having paid on entering into the arrangement was nil; or

(c)by virtue of regulations under paragraph 4 of Schedule 12 to that Act, any expenditure of the authority under the arrangement was not prescribed expenditure; or

(d)the arrangement related only to works which, in whole or in part, were carried out before 1st April 1990 and in relation to which, by reason only of regulations under subsection (7) of section 80A of that Act (payment for works), subsection (1) of that section did not apply or, to the extent that the works were carried out on or after that date, would not have applied if they had been carried out before that date.

(3)For the purpose of the application of sections 49 and 51 above in relation to a transitional credit arrangement—

(a)such an arrangement shall be taken to have come into being (in the form in which it was on 1st April 1990) on that date (and, accordingly, any consideration given under the arrangement before that date shall be disregarded); and

(b)the local authority shall be taken to have made available in connection with the arrangement (and in accordance with section 50 above) an amount of credit cover equal to the cost of the arrangement on 1st April 1990.

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Marginal Citations

Credit approvalsE+W

53 Basic credit approvals.E+W

(1)Before the beginning of each financial year, the Secretary of State shall issue to each local authority, in the form of a notice in writing, a credit approval with respect to the authority’s credit arrangements and expenditure for capital purposes during that year.

(2)A credit approval issued under this section (in this Part referred to as a “basic credit approval”) may be nil but, subject to that, shall be expressed as an amount of money.

(3)A basic credit approval shall have effect only for the financial year in respect of which it is issued and may be limited by excluding from the purposes for which the approval may be used capital purposes of a description specified in the approval.

(4)Where regulations made by the Secretary of State so require, a basic credit approval shall specify, directly or by reference to tables or other documents specified in the approval, a period (in this Part referred to as the “amortisation period”) during which the authority to whom the approval is issued are required to set aside, from a revenue account, as provision to meet credit liabilities, amounts determined in accordance with the regulations.

(5)Under subsection (4) above, if the regulations so provide, a basic credit approval may specify different amortisation periods in relation to the use of the approval in respect of credit arrangements and expenditure for capital purposes of different descriptions.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Modifications etc. (not altering text)

C65S. 53 applied (with modifications) (temp. 4.5.1995 - 31.3.1996) S.I. 1995/1041, art. 2 Sch. para. 4

S. 53 excluded (8.5.2000 for certain purposes otherwise 3.7.2000) by 1999 c. 29, s. 112(1) (with Sch. 12 para. 9(1)); S.I. 2000/801, art. 2, Sch. Pts. 2, 3

S. 53 applied (with modifications) (temp. 23.11.1995 - 31.3.1996) by S.I. 1995/2803, art. 19(2), Sch. 7 Pt. II para. 4

54 Supplementary credit approvals.E+W

(1)Any Minister of the Crown may at any time issue to a local authority, in the form of a notice in writing, a credit approval (in this Part referred to as a “supplementary credit approval”).

(2)A supplementary credit approval shall be expressed as an amount of money and shall be limited to credit arrangements and expenditure for capital purposes of a description specified in the approval (but, if the Minister concerned considers appropriate, all capital purposes may be so specified).

(3)A supplementary credit approval shall have effect for such period as is specified in the approval; and where such an approval is issued not more than six months after the end of a financial year, it may specify a period which begins or begins and ends at any time during that financial year.

(4)Subject to subsection (5) below, subsections (4) and (5) of section 53 above apply in relation to a supplementary credit approval as they apply in relation to a basic credit approval.

(5)In the case of a supplementary credit approval issued in respect of expenditure which is treated by the authority concerned as expenditure for capital purposes by virtue only of directions under section 40(6) above, the approval [F123may specify an amortisation period.].

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Amendments (Textual)

F123Words in s. 54(5) substituted (6.11.1997) by 1997 c. 63, s. 2

Modifications etc. (not altering text)

C66S. 54(2)-(5) applied (with modifications) (13.3.1996) by S.I. 1996/633, art. 6(3)

S. 54 excluded (8.5.2000 for certain purposes otherwise 3.7.2000) by 1999 c. 29, s. 112(1) (with Sch. 12 para. 9(1)); S.I. 2000/801, art. 2 Sch. Pts. 2, 3

55 Criteria for issuing credit approvals.E+W

(1)In determining the amount of a basic credit approval or a supplementary credit approval to be issued to a local authority, the Secretary of State or other Minister may have regard, subject to the following provisions of this section, to such factors as appear to him to be appropriate.

(2)Without prejudice to the generality of subsection (1) above, the Secretary of State or other Minister may, in particular, have regard—

(a)to the amount of any grants or contributions which it appears to him that the authority concerned have received and are likely to receive from any person in respect of expenditure incurred by the authority or to be incurred by them before the expiry of the period for which the credit approval is to have effect; and

(b)subject to subsection (3) below, to the amount of capital receipts which it appears to him that the authority have received, might reasonably be expected to have received or to receive or are likely to receive before the expiry of the period for which the credit approval is to have effect.

[F124(3)In determining the amount of a basic credit approval, the Secretary of State shall not take account of capital receipts to the extent that the authority concerned are required to set aside the receipts as provision for credit liabilities; and in determining the amount of a basic credit approval or a supplementary credit approval, the Secretary of State or other Minister shall not take account of capital receipts] to the extent that they are applied or paid as mentioned in subsections (7) to (9) of section 56 below

(4)In determining the amount of the basic credit approval or of a supplementary credit approval to be issued to a particular local authority in any financial year, the Secretary of State or other Minister shall not take account of the extent to which it appears to him that the local authority are or are likely to be in a position to finance expenditure for capital purposes from a revenue account.

(5)In this section “capital receipts” includes sums which constituted capital receipts for the purposes of Part VIII of the M95Local Government, Planning and Land Act 1980, whether or not they fall to be treated as capital receipts under section 58 below.

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Amendments (Textual)

F124Words in s. 55(3) substituted (6.11.1997) by 1997 c. 63, s. 1

Modifications etc. (not altering text)

C67S. 55 applied (with modifications) (13.3.1996) by S.I. 1996/633, art. 6(3)

S. 55 excluded (8.5.2000 for certain purposes otherwise 3.7.2000) by 1999 c. 29, s. 112(1) (with Sch. 12 para. 9(1)); S.I. 2000/801, art. 2, Sch. Pts. 2, 3

Marginal Citations

56 Use of credit approvals by local authorities.E+W

(1)Subject to Part I of Schedule 3 to this Act, where a local authority have received a basic credit approval or a supplementary credit approval, then, if they so determine, the approval may be treated wholly or partly—

(a)as authority not to charge to a revenue account an amount of expenditure which is defrayed during the period for which the approval has effect and which is for capital purposes to which the approval applies; or

(b)as authority, within the period for which the approval has effect, to enter into or agree to a variation of a credit arrangement for purposes to which the approval applies.

(2)Where a local authority have received a basic credit approval or a supplementary credit approval and that approval is not extinguished under section 57 below or Part I of Schedule 3 to this Act, then, if or to the extent that they have not made a determination with respect to it under subsection (1) above, the authority may, if they so determine, transfer the approval, reduced where appropriate under that section or Part, to another local authority, either in whole or in part; and, where such a transfer is made,—

(a)the transfer of the approval (or part) shall not be regarded for the purposes of this Part as its use by the transferor authority; and

(b)this Part (including this section) shall have effect as if the approval (subject to any reduction as mentioned above) had been issued, in whole or as to the part transferred, directly to the transferee authority.

(3)To the extent that and at the time when, in reliance on a credit approval,—

(a)an amount of expenditure which is not charged to a revenue account of the authority concerned is defrayed, or

(b)the authority concerned enter into or agree to a variation of a credit arrangement,

the credit approval shall be regarded as used and, accordingly, shall not be available on any subsequent occasion or for any other purpose.

(4)Subsection (3) above applies whether or not the determination under subsection (1) above precedes the date on which the expenditure is defrayed or, as the case may be, the credit arrangement is entered into or varied.

(5)A determination by a local authority under subsection (1) above that a credit approval is to be treated as mentioned in paragraph (a) or paragraph (b) of that subsection may not be made later than 30th September in the financial year following that in which the authority defray the expenditure or, as the case may be, enter into or vary the credit arrangement in question.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Modifications etc. (not altering text)

C68S. 56(1)(3)-(5) applied (with modifications) (13.3.1996) by S.I. 1996/633, art. 6(3)

S. 56 applied (3.7.2000) by 1999 c. 29, s. 118(3) (with Sch. 12 para. 9(1)); S.I. 2000/801, art. 2, Sch. Pt. III

57 Effect of certain capital grants on credit approvals.E+W

(1)In this section “specified capital grants” means grants, contributions and subsidies—

(a)which are paid to local authorities in aid of their expenditure for capital purposes;

(b)which are neither commuted payments falling within subsection (2) of section 63 below nor single or other payments falling within subsection (3)of that section; and

(c)which are, or to the extent that they are, specified for the purposes of this section by regulations made by the Secretary of State.

(2)If at any time a local authority receive a specified capital grant, such, if any, of the authority’s credit approvals as are relevant to that grant shall, in accordance with the following provisions of this section, be reduced or, as the case may be, extinguished by deducting there from an amount equal to the grant.

(3)For the purposes of this section, a credit approval is relevant to a specified capital grant if—

(a)the approval has effect at the time the grant is received or at any time thereafter; and

(b)the purposes for which the approval may be used are or include the purposes towards expenditure on which the grant is made.

(4)Subject to subsections (5) and (6) below, where, by virtue of subsection (2) above, a deduction is required in respect of a specified capital grant,—

(a)the deduction shall be applied to the credit approvals which are relevant to the grant in the order in which those approvals were received;

(b)subject to paragraph (d) below, the reduction or extinguishment of any such approval shall be regarded as taking place when the grant is received;

(c)if the amount of the deduction exceeds the total of the credit approvals which are relevant to the grant and were received before the grant, the excess shall be applied in reduction (or extinguishment) of credit approvals which are so relevant and are received later; and

(d)any such reduction or extinguishment of a later credit approval as is referred to in paragraph (c) above shall be regarded as taking place when the approval is received.

(5)Notwithstanding anything in subsection (4) above, any reduction or extinguishment of a credit approval which is required to be made under Part I of Schedule 3 to this Act shall be applied before any reduction or extinguishment under this section.

(6)In any case where—

(a)before the time when a specified capital grant is received by a local authority, the authority have made a determination under subsection (1) of section 56 above with respect to a credit approval which is relevant to that grant, and

(b)by virtue of subsection (3) of that section, that credit approval is to any extent to be regarded as having been used before that time,

the credit approval shall not, to that extent, be taken into account under subsections (2) and (4) above; but, subject to that, the making of a determination under section 56(1) above with respect to a credit approval shall not affect the operation of those subsections in relation to it.

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Modifications etc. (not altering text)

C69S. 57 applied (with modifications) (13.3.1996) by S.I. 1996/633, art. 6(3)

C70S. 57(4)(c) applied (with modifications) (1.4.1995) by S.I. 1995/798, reg. 7(2)

S. 57(4)(c) applied (with modifications) (1.4.1996) by S.I. 1996/633, art. 5(2)

Capital receiptsE+W

58 Capital receipts.E+W

(1)For the purposes of this Part, the capital receipts of a local authority are, subject to the following provisions of this section, those sums received by the authority in respect of—

(a)the disposal of any interest in an asset if, at the time of disposal, expenditure on the acquisition of the asset would be expenditure for capital purposes;

(b)the disposal of any investment other than an investment which, at the time of disposal, is an approved investment;

(c)the repayment of, or a payment in respect of, any grants or other financial assistance of such a description that, if the expenditure on the grant or assistance had been incurred at the time of the repayment or payment, it would have constituted expenditure for capital purposes; or

(d)the repayment of the principal of an advance (not being an approved investment) made by the authority for such a purpose that, if the advance had been made at the time of the repayment, expenditure incurred on it would have constituted expenditure for capital purposes;

and those sums become capital receipts at the time they are in fact received.

(2)The following sums are not capital receipts for the purposes of this Part, namely, sums received by an authority in respect of—

(a)the disposal of an interest in an asset which, at the time of the disposal, is an asset of a superannuation fund which the authority are required to keep by virtue of the M96Superannuation Act 1972;or

(b)the disposal of an investment held for the purposes of such a superannuation fund; or

(c)any repayment or payment such as is mentioned in paragraph (c) or paragraph (d) of subsection (1) above which is made to such a superannuation fund.

(3)Subsection (1) above applies to sums received on or after 1st April l990 but regardless of when the disposal or advance was made or the grant or other financial assistance was given and, in particular, whether or not it was made or given on or after that date but, in the case of a disposal made before that date, the reference in paragraph (a) or, as the case may be, paragraph (b) of subsection (1) above to the time of the disposal shall be construed as a reference to 1st April 1990.

(4)Subject to subsection (6) below, to the extent that any sums which were received by a local authority before lst April 1990 and either—

(a)constituted capital receipts for the purposes of Part VIII of the M97Local Government, Planning and Land Act 1980, or

(b)did not constitute such receipts by virtue of regulations under section 75(5) of that Act but are specified for the purposes of this subsection by regulations made by the Secretary of State,

are represented in the authority’s accounts for the financial year ending immediately before that date either by amounts shown as capital receipts which are unapplied as at the end of that year or by amounts included in the balance as at the end of that year of any fund established by the authority under paragraph 16 of Schedule 13 to the M98Local Government Act 1972, those sums shall be treated for the purposes of this Part as capital receipts received by the authority on that date; and any reference in this Part to “1980 Act receipts” is a reference to sums which are capital receipts by virtue of this subsection.

(5)So far as may be necessary for the purposes of this Part, a local authority shall identify which (if any) sums falling within paragraphs (a) and (b) of subsection (4) above are represented by amounts included as mentioned in that subsection in the balance of a fund established as so mentioned.

(6)Subsection (4) above does not apply to a sum in respect of which an amount shown as an unapplied capital receipt or included in a balance as mentioned in that subsection is, on 1st April 1990, held in an investment which is not on that date an approved investment; and, so far as may be necessary for the purposes of this Part, where on that date a local authority hold investments which are not then approved investments, the authority shall identify which (if any) of the amounts so shown or included are to be treated as held in such investments.

(7)Where an asset or investment falling within paragraph (a) or paragraph (b)of subsection (1) above is disposed of and the whole or part of the purchase price is not received by the authority at the time of the disposal, then, subject to subsection (9) below, any interest payable to the authority in respect of the whole or any part of the price shall not be regarded as a capital receipt.

(8)Subject to subsection (9) below, in the case of a disposal of an asset which consists of the grant, assignment or surrender of a leasehold interest in any land or the lease of any other asset, only the following are capital receipts, —

(a)any premium paid on the grant or assignment;

(b)any consideration received in respect of the surrender;

(c)any sum paid by way of rent more than three months before the beginning of the rental period to which it relates;

(d)any sum paid by way of rent in respect of a rental period which exceed sone year; and

(e)so much of any other sum paid by way of rent as, in accordance with directions given by the Secretary of State, falls to be treated as a capital receipt.

(9)If the Secretary of State by regulations so provides,—

(a)the whole or such part as may be determined under the regulations of a sum received by a local authority and which, apart from this subsection, would not be a capital receipt shall be such a receipt; and

(b)the whole or such part as may be so determined of a sum which, apart from this subsection, would be a capital receipt shall not be such a receipt.

(10)This section and sections 59 to 61 below have effect subject to Part II of Schedule 3 to this Act in relation to certain disposals, payments and repayments occurring before 1st April 1990.

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Marginal Citations

M971980c. 65.

59 The reserved part of capital receipts. E+W
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Modifications etc. (not altering text)

C71S. 59 modified by S.I. 1990/432, regs. 17, 18,19(1)–(4) and reg. 19A (as added by S.I. 1991/500, reg. 2(f))

(1)At the time when a local authority receive a capital receipt, a part of that receipt (in this Part referred to as “the reserved part”) shall be set aside by the authority as provision to meet credit liabilities.

(2)Subject to the following provisions of this section, the reserved part of a capital receipt shall be—

(a)in the case of a receipt in respect of the disposal of dwelling-housesheld for the purposes of Part II of the M99Housing Act 1985 (provision of housing), 75 per cent; and

(b)in the case of any other receipt, 50 per cent.

(3)The Secretary of State may by regulations alter the percentage which (by virtue of subsection (2) above or the previous exercise of this power) is for the time being the reserved part of any capital receipt or provide that the amount which is the reserved part of any capital receipt shall be determined in accordance with the regulations; and any such regulations may make different provision in relation to—

(a)different descriptions of capital receipts; and

(b)different descriptions of local authority;

and where the regulations specify a percentage, it may be any percentage from nil to 100.

(4)If the Secretary of State by regulations so provides, capital receipts of a description specified in the regulations shall be treated for the purposes only of this section as reduced by an amount determined in accordance with the regulations.

(5)In the exercise of the power conferred by subsection (3) or subsection (4) above, capital receipts and local authorities may be differentiated in any manner which appears to the Secretary of State to be appropriate and, in particular,—

(a)capital receipts may be differentiated by reference to the source from which they are derived including, in the case of receipts derived from disposals, different descriptions of disposals; and

(b)local authorities may be differentiated by reference to their type, their credit ceilings and the nature of their statutory powers and duties.

(6)Without prejudice to subsection (3) above, in any case where—

(a)the consent of the Secretary of State is required for a disposal of a dwelling-house or any other property, and

(b)the Secretary of State gives a direction under this subsection with respect to a capital receipt in respect of that disposal,

subsection (2) above shall have effect in relation to that capital receipt as if it provided that the reserved part of the receipt were a percentage thereof specified in the direction or, according as the direction provides, an amount determined in accordance with the direction; but any direction under this subsection relating to a 1980 Act receipt shall be made before 1st April 1990.

(7)Subsection (1) above does not apply to a capital receipt received by an authority as trustee of a trust fund which is held for charitable purposes.

(8)Where a local authority receive a capital receipt in respect of an asset, investment, grant or other financial assistance which was originally acquired or made by the authority wholly or partly out of moneys provided by Parliament on terms which require, or enable a Minister of the Crown to require, the payment of any sum to such a Minister on or by reference to the disposal ofthe asset or investment or the repayment of the grant or assistance, the amount of the capital receipt shall be treated for the purposes of the preceding provisions of this section as reduced by the sum which appears tothe authority to be so payable, including, in the case of a 1980 Act receipt,any sum which was payable, but was not in fact paid, before 1st April 1990.

(9)Where a local authority receive a capital receipt, not being a 1980 Act receipt, in respect of—

(a)a disposal of land held for the purposes of Part II of the M100Housing Act 1985, or

(b)any other disposal of land made by virtue of Part V (the right to buy) of that Act,

the amount of the capital receipt shall be treated for the purposes of the preceding provisions of this section as reduced by so much of the receipt as is applied by the authority in defraying the administrative costs of and incidental to any such disposal.

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Modifications etc. (not altering text)

C71S. 59 modified by S.I. 1990/432, regs. 17, 18,19(1)–(4) and reg. 19A (as added by S.I. 1991/500, reg. 2(f))

C72S. 59 restricted (1.4.1996) by S.I. 1996/633, art. 7(1)(b)

C73S. 59(2) restricted (1.4.1996) by S.I. 1996/633, art. 7(1)(a)

Marginal Citations

60 The usable balance of capital receipts.E+W

(1)This section applies to the balance of any capital receipts received by a local authority after deducting—

(a)the reserved part of each such receipt; and

(b)any sum which, by virtue of subsection (8) or subsection (9) of section 59 above, falls to be deducted in determining the amount of any receipt for the purposes of the preceding provisions of that section;

but nothing in this section applies to a capital receipt which falls within section 59(7) above.

(2)The balance referred to in subsection (1) above (in this Part referred to as “the usable part” of the authority’s capital receipts) shall be applied by the local authority, according as they determine, in one of the following ways, or partly in one way and partly in the other,—

(a)to meet expenditure incurred for capital purposes; or

(b)as provision to meet credit liabilities;

and, subject to subsection (3) below, may be so applied in the financial year in which the receipts are received or in any later financial year.

(3)A determination by a local authority under subsection (2) above as to the manner in which the usable part of their capital receipts are to be applied may not be made later than 30th September in the financial year following that in which, in accordance with the determination, the receipts are to be applied.

(4)For the purposes of this Part, to the extent that the usable part of an authority’s capital receipts are applied as mentioned in subsection (2)(a) above, it shall be taken to be so applied at the time when the expenditure in question is defrayed.

(5)For the purposes of this Part, to the extent that the usable part of an authority’s capital receipts are applied as mentioned in subsection (2)(b) above, it shall be taken to be so applied—

(a)if it is used as an amount of credit cover as mentioned in section 50(3)(b) above, when the credit arrangement in question is entered into or varied; and

(b)subject to subsection (6) below, in any other case, on the last day of the financial year in which (pursuant to the local authority’s determination) it is so applied.

(6)In the case of a determination under subsection (2) above which—

(a)relates to the application of the usable part of a 1980 Act receipt in the financial year beginning on 1st April 1990, and

(b)is made not later than 30th September 1990,

subsection (5)(b) above shall have effect with the substitution of areference to 1st April 1990 for the reference to the last day of the financial year in which the usable part is so applied.

61 Capital receipts not wholly in money paid to the authority. E+W
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Modifications etc. (not altering text)

(1)This section applies where—

(a)the whole or part of the consideration received by a local authority on or after 1st April 1990 for a disposal falling within section 58(1) above either is not in money or consists of money which, at the request or with the agreement of the local authority concerned, is paid otherwise than to the authority; or

(b)the right of a local authority to receive such a repayment or payment as is referred to in section 58(1) above is assigned or waived for a consideration which is received on or after 1st April 1990 and which, in whole or in part, is not in money or which, at the request or with the agreement of the local authority, is paid otherwise than to the authority; or

(c)on a disposal falling within section 58(8) above, any consideration isreceived on or after 1st April 1990 and, if it had been in money paid to the authority, it would have been a capital receipt.

(2)Where this section applies in relation to any consideration, there shall be determined the amount which would have been the capital receipt if the consideration had been wholly in money paid to the local authority; and, subject to subsection (3) below, the amount so determined is in this section referred to as “the notional capital receipt”.

(3)From the amount which, apart from this subsection, would be the notional capital receipt in relation to a disposal, repayment or payment there shall be deducted any amount of money that was paid or is payable to the local authority in respect of that disposal, repayment or payment and in respect of which section 59 above actually applies or will actually apply when the payment is received.

(4)Where consideration to which this section applies is received in respect of a disposal, repayment or payment, the local authority shall set aside, at the time of the disposal or the assignment or waiver of the repayment or payment, and as provision to meet credit liabilities, an amount which, except in so far as regulations made or directions given by the Secretary of State otherwise provide, shall be equal to that which, under section 59 above, would be the reserved part of the notional capital receipt.

(5)The amount falling to be set aside by a local authority under subsection (4) above shall be so set aside—

(a)from the usable part of the authority’s capital receipts; or

(b)from a revenue account of the authority.

(6)If the Secretary of State by regulations so provides,—

(a)consideration which is not in money, which is received by a local authority and which is of a description specified in the regulations, or

(b)consideration which is in money, which is paid otherwise than to the authority and which is of a description specified in the regulations,

shall be treated for the purposes of subsections (2), (4) and (5) above as consideration to which this section applies and, in relation to any such consideration, subsection (4) above shall apply with such modifications as are specified in the regulations.

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Modifications etc. (not altering text)

Aggregate credit limitE+W

62 Aggregate credit limit.E+W

(1)For each local authority there shall be an aggregate credit limit which,subject to subsection (2) below, at any time shall be the total at that time of—

(a)the authority’s temporary revenue borrowing limit;

(b)the authority’s temporary capital borrowing limit;

(c)the authority’s credit ceiling, as determined under Part III of Schedule 3 to this Act; and

(d)the excess of the authority’s approved investments and cash over their usable capital receipts;

but the reference in paragraph (d) above to approved investments and cash does not include investments or cash held for the purposes of such a superannuation fund or trust fund as is referred to in paragraph (h) or paragraph (i) of subsection (2) of section 42 above.

(2)On an application made by a local authority, the Secretary of State may direct that, for any period specified in the direction, the amount which, apart from the direction, would be the authority’s aggregate credit limit at any time during that period shall be increased by an amount specified in the direction with respect to that period; and any increase specified in a direction under this subsection may be expressed to have effect subject to compliance with such terms and conditions as may be so specified.

(3)Subject to subsection (4) below, an authority’s temporary revenue borrowing limit at any time is whichever is the less of—

(a)the total sums which at that time remain to be received by the authority and which, as income, fall or will fall to be credited to a revenue account of the authority for the current financial year; and

(b)the aggregate of—

(i)the total sums which, up to and including that time (whether in the current or a previous financial year), the authority have disbursed in respect of expenditure which falls to be charged to a revenue account of the authority for the current financial year; and

(ii)any relevant arrears in respect of which provision has been or is to be charged to such a revenue account or which have been or are to be written off and charged to such a revenue account;

and for the purposes of paragraph (b)(ii) above “relevant arrears” are amounts in respect of income which remain to be received by the authority and which, as income, fall to be credited to a revenue account of the authority for the financial year beginning two years before the beginning of the current financial year.

(4)At any time in a financial year the amount which, apart from this subsection, would be an authority’s temporary revenue borrowing limit shall be increased by the addition of an amount in respect of the immediately preceding financial year, being whichever is the less of—

(a)the excess (if any) of the total sums which, up to and including that time, the authority have disbursed in respect of expenditure falling to be charged to a revenue account of the authority for that preceding year over the total sums which, up to and including that time, the authority have received in respect of income falling to be credited to such a revenue account; and

(b)the total sums which at that time remain to be received by the authority and which, as income, fall or will fall to be credited to a revenue account of the authority for that preceding year.

(5)An authority’s temporary capital borrowing limit at any time is so much of the expenditure defrayed by the authority for capital purposes in the eighteen months ending at that time as is due to be, but at that time has not yet been, re-imbursed by any other person, excluding expenditure which is to be re-imbursed or met out of grants from a Community institution [F125other than contributions from any of the Structural Funds]; and for this purpose it is immaterial whether the re-imbursement is due as a result of an obligation arising by statute, contract or otherwise or is to take the form of a grant or other obligation voluntarily undertaken.

(6)If at any time an authority’s usable capital receipts exceed their approved investments and cash referred to in paragraph (d) of subsection (1) above, the amount taken into account under that paragraph shall be a negative amount.

(7)Where an amount taken into account under paragraph (c) or paragraph (d) of subsection (1) above is a negative amount, it shall be a deduction in determining the total referred to in that subsection.

(8)Any reference in this section to an authority’s usable capital receipts at any time is a reference to the usable part of the authority’s capital receipts so far as they have not been applied before that time.

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Amendments (Textual)

F125Words in s. 62(5) inserted (1.4.2000) by S.I. 2000/589, art. 2(1)(3)

Modifications etc. (not altering text)

Amounts set aside to meet credit liabilitiesE+W

63 Duty to set certain amounts aside as provision to meet credit liabilities.E+W

(1)Without prejudice to any other provision of this Part under which a local authority are required or authorised to set aside any amount as provision to meet credit liabilities, in each financial year a local authority shall, by virtue of this section, set aside, from such revenue account or accounts as the authority think fit, as provision to meet credit liabilities, an amount determined by the authority, being not less than the minimum revenue provision for that year referred to in Part IV of Schedule 3 to this Act.

(2)Where, by virtue of section 157 below, the Secretary of State makes to a local authority a commuted payment, within the meaning of that section, the authority shall, at the time the payment is received, set aside an amount equal to that payment as provision to meet credit liabilities.

(3)If, otherwise than by virtue of section 157 below, the Secretary of State or any other Minister of the Crown commutes into a single payment (or into a smaller number of payments than would otherwise be payable) sums which would otherwise have been paid to a local authority annually or by reference to any other period of time, the authority shall, at the time that single payment or,as the case may be, each of that smaller number of payments is received, set aside an amount equal to the payment as provision to meet credit liabilities.

(4)Where a local authority receive any sum [F126towards the authority’s expenditure on capital purposes by way of grant from a Community institution other than a contribution from any of the Structural Funds,]they shall at the time the sum is received, set aside an amount equal to that sumas provision to meet credit liabilities.

(5)A determination under subsection (1) above shall be made not later than 30th September in the financial year following that to which the determination relates.

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Amendments (Textual)

F126Words in s. 63(4) substituted (1.4.2000) by S.I. 2000/589, art. 2(1)(4)

63 Duty to set certain amounts aside as provision to meet credit liabilities.E+W

(1)Without prejudice to any other provision of this Part under which a local authority are required or authorised to set aside any amount as provision to meet credit liabilities, in each financial year a local authority shall, by virtue of this section, set aside, from such revenue account or accounts as the authority think fit, as provision to meet credit liabilities, an amount determined by the authority, being not less than the minimum revenue provision for that year referred to in Part IV of Schedule 3 to this Act.

(2)Where, by virtue of section 157 below, the Secretary of State makes to a local authority a commuted payment, within the meaning of that section, the authority shall, at the time the payment is received, set aside an amount equal to that payment as provision to meet credit liabilities.

(3)If, otherwise than by virtue of section 157 below, the Secretary of State or any other Minister of the Crown commutes into a single payment (or into a smaller number of payments than would otherwise be payable) sums which would otherwise have been paid to a local authority annually or by reference to any other period of time, the authority shall, at the time that single payment or, as the case may be, each of that smaller number of payments is received, set aside an amount equal to the payment as provision to meet credit liabilities.

(4)Where a local authority receive any sum [F353towards the authority’s expenditure on capital purposes by way of grant from a Community institution other than a contribution from any of the Structural Funds,]they shall at the time the sum is received, set aside an amount equal to that sumas provision to meet credit liabilities.

(5)A determination under subsection (1) above shall be made not later than 30th September in the financial year following that to which the determination relates.

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Amendments (Textual)

F353Words in s. 63(4) substituted (1.4.2000) by S.I. 2000/589, art. 2(1)(4)

64 Use of amounts set aside to meet credit liabilities.E+W

(1)Amounts for the time being set aside by a local authority (whether voluntarily or pursuant to a requirement under this Part) as provision to meet credit liabilities may, subject to subsection (2) below, be applied only forone or more of the following purposes—

(a)to meet any liability of the authority in respect of money borrowed by the authority, other than a liability in respect of interest;

(b)to meet any liability of the authority in respect of credit arrangements,other than those excluded by regulations under paragraph 11 of Schedule 3 to this Act; and

(c)where a credit approval has been used as authority not to charge particular expenditure to a revenue account, to meet that expenditure.

(2)Subject to the following provisions of this section if, on the date which is the relevant date for any financial year, a local authority’s credit ceiling, as determined under Part III of Schedule 3 to this Act, is a negative amount, any such amount as is referred to in subsection (1) above may in that financial year—

(a)be applied for purposes specified by regulations made by the Secretary of State; or

(b)be transferred to a body so specified.

(3)The aggregate of the amounts which may be applied by a local authority inaccordance with subsection (2) above in any financial year shall not exceed the amount by which the authority’s credit ceiling on the relevant date is less than nil.

(4)References in subsections (2) and (3) above to the relevant date shall be construed as follows—

(a)for the financial year beginning on 1st April 1990, the relevant date is that date; and

(b)for any subsequent financial year, the relevant date is the last day of the preceding financial year.

(5)Regulations under subsection (2) above may specify conditions with which a local authority must comply in applying or transferring any amount as mentioned in that subsection and with respect to any amount so applied or transferred; and an amount shall not be taken to be applied or transferred under that subsection unless any such conditions are complied with.

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Modifications etc. (not altering text)

C77S. 64 excluded (20.7.1993) by 1993 c. 28, s. 136(8)

SupplementaryE+W

65 Information.E+W

(1)The Secretary of State may serve on a local authority a notice requiring the authority to supply to him such information as is specified in the notice and is required by him—

(a)for the purpose of deciding whether to exercise his powers, and how to perform his functions, under this Part; or

(b)for the purpose of ascertaining whether an authority have acted, or are likely to act, in accordance with this Part; or

(c)for the purpose of assisting the formulation of government economic policies;

but no information shall be required for the purpose specified in paragraph (c) above unless it relates to, or to plans or proposals about, the finances and expenditure of the authority or of any company in which the authority have an interest.

(2)If the information specified in a notice under this section is in the possession or under the control of the authority on whom the notice is served, the authority shall supply the information required in such form and manner, and at such time, as is specified in the notice and, if the notice so requires, the information shall be certified (according as is specified in the notice) in one or both of the following ways,—

(a)by the chief finance officer of the authority, within the meaning of section 5 above, or by such other person as may be specified in the notice; and

(b)under arrangements made by the Audit Commission for Local Authorities in England and Wales.

(3)If a local authority fail to comply with subsection (2) above, the Secretary of State may decide—

(a)whether to exercise his powers, and how to perform his functions, under this Part, or

(b)whether the authority have acted, or are likely to act, in accordance with this Part,

on the basis of such assumptions and estimates as he thinks fit.

(4)In deciding—

(a)whether to exercise his powers, and how to perform his functions, under this Part, or

(b)whether an authority have acted, or are likely to act, in accordance with this Part,

the Secretary of State may also take into account any other information available to him, whatever its source and whether or not obtained under a provision contained in or made under this or any other enactment.

66 Interpretation of Part IV.E+W

(1)In this Part—

(a)approved investments” means investments approved for the purposes of this Part by regulations made by the Secretary of State;

(b)financial year” means the period of twelve months beginning on 1st April;

(c)Minister of the Crown” has the same meaning as in theMinisters of the M101Crown Act 1975; F127. . .

(d)1980 Act receipt” has the meaning given by section 58(4) above. [F128and

(e) “Structural Funds” has the same meaning as in Article 2(1) of Council Regulation (EC) No. 1260/1999.]

(2)For the purposes of this Part, a local authority—

(a)incur a liability in respect of a payment at the time when they become unconditionally liable to make the payment; and

(b)discharge a liability in respect of a payment at the time when they make the actual payment, whether or not they have at that time become unconditionally liable to do so.

(3)In relation to a credit arrangement,—

(a)any reference in this Part to consideration given or to be given by the local authority under the arrangement does not include a reference to any consideration which is given before the time the arrangement comes into being (as defined in section 48(3) above); and

(b)any reference in this Part to a liability of the local authority under thearrangement does not include a reference to a liability which is met by the making of a payment before that time.

(4)In relation to a local authority, references in this Part to proper practices are references to those accounting practices—

(a)which the authority are required to follow by virtue of any enactment; or

(b)which, whether by reference to any generally recognised published code or otherwise, are regarded as proper accounting practices to be followed in the keeping of the accounts of local authorities, either generally or of the description concerned;

but, in the event of any conflict in any respect between the practices falling within paragraph (a) above and those falling within paragraph (b)above, only those falling within paragraph (a) above are to be regarded as proper practices.

(5)Subsection (4) above has effect not only for the purposes of this Act but also for the purposes of—

(a)any enactment passed after or in the same Session as this Act; and

(b)F129. . .the M102Local Government Finance Act 1988.

(6)If, under or by virtue of any enactment, all or any of the liabilities of an authority (in this subsection referred to as “the original authority”) in respect of a loan to or borrowing (or money borrowed) by the authority have become liabilities of another local authority (in this subsection referred to as “the current authority”) then, in so far as regulations made by the Secretary of State so provide,—

(a)in relation to the current authority, any reference in this Part to a loan to or borrowing (or money borrowed) by that authority includes a reference to the loan to or borrowing (or money borrowed) by the original authority; and

(b)if the original authority is a local authority for the purposes of this Part, any reference to a loan to or borrowing (or money borrowed) by that authority excludes a reference to the loan, borrowing (or money borrowed) in respect of which the liabilities have become those of the current authority.

(7)For the avoidance of doubt, except as provided by section 44(5) above, any reference in this Part to borrowing by a local authority does not include a reference to the temporary use by an authority of money forming part of a particular fund of the authority for a purpose other than that of the fund.

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Amendments (Textual)

F127Word in s. 66(1)(c) omitted (1.4.2000) by virtue of S.I. 2000/589, art. 2(1)(5)

F128S. 66(1): words at the end of para. (d) inserted (1.4.2000) by S.I. 2000/589, art. 2(1)(5)

Modifications etc. (not altering text)

C78S. 66(6) extended (1.4.1995) by S.I. 1995/798, reg. 9

Marginal Citations

Part VE+W Companies in which Local Authorities have interests

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Modifications etc. (not altering text)

C79Pt. V (ss. 67-73): power conferred to make provisions about matters of the kind dealt with in this part (1.9.1997) by 1997 c. 50, s. 44(1), Sch. 4 para. (j)(iii); S.I. 1997/1930, art. 2(1)(2)(m)

67 Application of, and orders under, Part V.E+W

(1)Any reference in this Part to a company is a reference to a body corporate of one of the following descriptions—

(a)a company limited by shares;

(b)a company limited by guarantee and not having a share capital;

(c)a company limited by guarantee and having a share capital;

(d)an unlimited company; and

(e)a society registered or deemed to be registered under the M103Industrial and Provident Societies Act 1965 or under the M104Industrial and Provident Societies Act (Northern Ireland) 1969.

(2)Expressions used in paragraphs (a) to (d) of subsection (1) above have the same meaning as in Chapter I of Part I of the M105Companies Act 1985 or the corresponding enactment for the time being in force in Northern Ireland.

(3)Any reference in this Part to a local authority is a reference to a body of one of the following descriptions—

(a)a county council;

[F130(aa)a county borough council;]

(b)a district council;

[F131(bb)the Greater London Authority;

F131(bc)a functional body, within the meaning of the Greater London Authority Act 1999;]

(c)a London borough council;

(d)the Common Council of the City of London in its capacity as a local authority, police authority or port health authority;

(e)the Council of the Isles of Scilly;

(f)a parish council;

(g)a community council;

[F132(ga)the Greater London Magistrates’ Courts Authority;.]

(h)a fire authority constituted by a combination scheme under the M106Fire Services Act 1947;

[F133(i)a police authority established under [F134section 3 of the Police Act 1996]...;]

(j)an authority established under section 10 of the M107Local Government Act 1985 (waste disposal authorities);

(k)a joint authority established by Part IV of that Act ([F135police,] fire services, civil defence and transport);

(l)any body established pursuant to an order under section 67 of that Act (successors to residuary bodies);

(m)the Broads Authority;

[F136(ma)a National Park authority;]

(n)any joint board the constituent members of which consist of any of the bodies specified above;

F137(o). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F138(oo)a joint planning board constituted for an area in Wales outside a National Park by an order under section 2(1B) of the M108Town and Country Planning Act 1990; and]

(p)a Passenger Transport Executive.

(4)Any power to make an order under this Part shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament; and under any such power different provision maybe made for different cases and different descriptions of cases (including different provision for different areas).

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Amendments (Textual)

F131S. 67(3)(bb)(bc) inserted (8.5.2000 for specified purposes otherwise 3.7.2000) by 1999 c. 29, s. 393(1)(2) (with Sch. 12 para. 9(1)); S.I. 2000/3434, arts. 3, 4

F133S. 67(3)(i) substituted (1.10.1994 for specified purposes otherwise 1.4.1995) by 1994 c. 29, s. 43, Sch. 4 Pt. I para. 39; S.I. 1994/2025, art. 6; S.I. 1994/3262, art. 4, Sch.

F135Word in s. 67(3)(k) repealed (1.4.1995 (E.W.) otherwise (prosp.)) by 1994 c. 29, s. 93, Sch. 9 Pt. I; S.I. 1994/3262, art. 4, Sch.

Commencement Information

I2S. 67 wholly in force at 7.10.1993; s. 67 not in force at Royal Assent see s. 195(2); s. 67 in force for certain purposes at 16.1.1990 by S.I. 1989/2445, art. 4; s. 67 in force so far as not already in force at 7.10.1993 by S.I. 1993/2140, art. 3

Marginal Citations

M1041969 c.24. (N.I.)

M1061947c. 41.

68 Companies controlled by local authorities and arm’s length companies.E+W

(1)For the purposes of this Part, unless the Secretary of State otherwise directs, a company is for the time being under the control of a local authority if—

(a)by virtue of section 736 of the M109Companies Act 1985 the company is at that time a subsidiary of the local authority for the purposes of that Act; or

(b)paragraph (a) above does not apply but the local authority have at that time power to control a majority of the votes at a general meeting of the company as mentioned in subsection (3) below; or

(c)paragraph (a) above does not apply but the local authority have at that time power to appoint or remove a majority of the board of directors of the company; or

(d)the company is under the control of another company which, by virtue of this subsection, is itself under the control of the local authority;

and, for the purposes of paragraph (d) above, any question whether one company is under the control of another shall be determined by applying the preceding provisions of this subsection, substituting a reference to the other company for any reference to the local authority.

(2)A direction under subsection (1) above—

(a)may be limited in time and may be made conditional upon such matters as appear to the Secretary of State to be appropriate; and

(b)may be made with respect to a particular company or a description of companies specified in the direction.

(3)The reference in subsection (1)(b) above to a power to control a majority of votes at a general meeting of the company is a reference to a power which is exercisable—

(a)in the case of a company limited by shares, through the holding of equity share capital in any one or more of the following ways, namely, by the local authority, by nominees of the local authority and by persons whose shareholding is under the control of the local authority; or

(b)in the case of any company, through the holding of votes at a general meeting of the company in any one or more of the following ways, namely, by the local authority, by a group of members of the company the composition of which is controlled by the local authority and by persons who have contractually bound themselves to vote in accordance with the instructions ofthe local authority; or

(c)partly in one of those ways and partly in the other.

(4)Subsection (3) of section 736A of the M110Companies Act 1985 (right to appoint or remove a majority of a company’s board of directors) and the following provisions of that section as they have effect in relation to subsection (3) apply for the purposes of subsection (1)(c) above with the substitution for the word “right”, wherever it occurs, of the word “power”.

(5)For the purposes of subsection (3)(a) above, a person’s shareholding is under the control of a local authority if—

(a)his right to hold the shares arose because of some action which the authority took, or refrained from taking, in order to enable him to have the right; and

(b)the local authority, alone or jointly with one or more other persons can require him to transfer his shareholding (or any part of it) to another person.

(6)Notwithstanding that, by virtue of the preceding provisions of this section, a company is for the time being under the control of a local authority, the company is for the purposes of this Part an “arm’s length company”, in relation to any financial year if, at a time before the beginning of that year, the authority resolved that the company should be an arm’s length company and, at all times from the passing of that resolution up to the end of the financial year in question, the following conditions have applied while the company has been under the control of the local authority,—

(a)that each of the directors of the company was appointed for a fixed term of at least two years;

(b)that, subject to subsection (7) below, no director of the company has been removed by resolution under section 303 of the Companies Act 1985;

(c)that not more than one-fifth of the directors of the company have been members or officers of the authority;

(d)that the company has not occupied (as tenant or otherwise) any land in which the authority have an interest otherwise than for the best consideration reasonably obtainable;

(e)that the company has entered into an agreement with the authority that the company will use its best endeavours to produce a specified positive return on its assets;

(f)that, except for the purpose of enabling the company to acquire fixed assets or to provide it with working capital, the authority have not lent money to the company or guaranteed any sum borrowed by it or subscribed for any securities in the company;

(g)that the authority have not made any grant to the company except in pursuance of an agreement or undertaking entered into before the financial year (within the meaning of the Companies Act 1985) of the company in which the grant was made; and

(h)that the authority have not made any grant to the company the amount of which is in any way related to the financial results of the company in any period.

(7)If the Secretary of State so directs, the removal of a director shall be disregarded for the purposes of subsection (6)(b) above; but the Secretary of State shall not give such a direction if it appears to him that the director was removed with a view to influencing the management of the company for other than commercial reasons.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Modifications etc. (not altering text)

C80S. 68 applied (with modifications) (11.3.1996) by S.I. 1996/330, reg. 9(1)

C81S. 68(1) applied (29.4.1996) by 1992 c. 19, s. 1A(5) (as inserted (29.4.1996) by 1996 c. 10, s. 5(2)) (which amendment fell (11.9.1998) by reason of the repeal of 1996 c. 10, s. 5(2) by 1998 c. 18, ss. 54(3), 55(2), Sch. 5)

S. 68(1) applied (11.9.1998) by 1998 c. 18, ss. 45(5), 55(2)

C82S. 68(1) applied (with modifications) (14.3.1995) by S.I. 1995/402, reg. 3(2)

Commencement Information

I3S. 68 wholly in force at 7.10.1993; s. 68 not in force at Royal Assent see s. 195(2); s. 68 in force for certain purposes at 16.1.1990 by S.I. 1989/2445, art. 4; s. 68 in force so far as not already in force at 7.10.1993 by S.I. 1993/2410, art. 3

Marginal Citations

69 Companies subject to local authority influence.E+W

(1)For the purposes of this Part, unless the Secretary of State otherwise directs, a company which is not at the time under the control of a local authority is for the time being subject to the influence of a local authority if it is not a banking or insurance company or a member of a banking or insurance group and at that time there is such a business relationship between the company and the authority as is referred to in subsection (3) below and either—

(a)at least 20 per cent. of the total voting rights of all the members having the right to vote at a general meeting of the company are held by persons who are associated with the authority as mentioned in subsection (5) below; or

(b)at least 20 per cent. of the directors of the company are persons who are so associated; or

(c)at least 20 per cent. of the total voting rights at a meeting of the directors of the company are held by persons who are so associated.

(2)A direction under subsection (1) above—

(a)may be limited in time and may be made conditional upon such matters as appear to the Secretary of State to be appropriate; and

(b)may be made with respect to a particular company or a description of companies specified in the direction.

(3)For the purposes of this section there is a business relationship between a company and a local authority at any time if the condition in any one or more of the following paragraphs is fulfilled—

(a)within a period of twelve months which includes that time the aggregate of the payments to the company by the authority or by another company which is under the control of the authority represents more than one-half of thecompany’s turnover, as shown in its profit and loss account for the most recent financial year for which the company’s auditors have made a report on the accounts or, if there is no such account, as estimated by the authority for the period of twelve months preceding the date of the estimate or for such part of that period as follows the formation of the company;

(b)more than one-half of the company’s turnover referred to in paragraph (a) above is derived from the exploitation of assets of any description in which the local authority or a company under the control of the authority has an interest (disregarding an interest in land which is in reversion on a lease granted for more than 7 years);

(c)the aggregate of—

(i)grants made either by the authority and being expenditure for capital purposes or by a company under the control of the authority, and

(ii)the nominal value of shares or stock in the company which is owned by the authority or by a company under the control of the authority,

exceeds one-half of the net assets of the company;

(d)the aggregate of—

(i)grants falling within paragraph (c)(i) above,

(ii)loans or other advances made or guaranteed by the authority or by a company under the control of the authority, and

(iii)the nominal value referred to in paragraph (c)(ii) above,

exceeds one-half of the fixed and current assets of the company;

(e)the company at that time occupies land by virtue of an interest which it obtained from the local authority or a company under the control of the authority and which it so obtained at less than the best consideration reasonably obtainable; and

(f)the company intends at that time to enter into (or complete) a transaction and, when that is done, there will then be a business relationship between the company and the authority by virtue of any of paragraphs (a) to (e) above.

(4)In subsection (3) above—

(a)the reference in paragraph (c) to the net assets of the company shall beconstrued in accordance with section 152(2) of the M111Companies Act 1985; and

(b)the reference in paragraph (d) to the fixed and current assets of the company shall be construed in accordance with paragraph 77 of Schedule 4 to that Act;

and in either case, the reference is a reference to those assets as shown in the most recent balance sheet of the company on which, at the time in question, the auditors have made a report or, if there is no such balance sheet, as estimated by the local authority for the time in question.

(5)For the purposes of this section, a person is at any time associated with a local authority if—

(a)he is at that time a member of the authority;

(b)he is at that time an officer of the authority;

(c)he is at that time both an employee and either a director, manager, secretary or other similar officer of a company which is under the control of the authority; or

(d)at any time within the preceding four years he has been associated with the authority by virtue of paragraph (a) above.

(6)If and to the extent that the Secretary of State by order so provides, a person is at any time associated with a local authority if—

(a)at that time he is, or is employed by or by a subsidiary of, a person who for the time being has a contractual relationship with the authority to provide—

(i)advice with regard to the authority’s interest in any company (whether existing or proposed to be formed), or

(ii)advice with regard to the management of an undertaking or the development of land by a company (whether existing or proposed to be formed) with which it is proposed that the authority should enter into any lease, licence or other contract or to which it is proposed that the authority should make any grant or loan, or

(iii)services which facilitate the exercise of the authority’s rights in any company (whether by acting as the authority’s representative at a meeting of the company or as a director appointed by the authority or otherwise);

(b)at any time within the preceding four years, he has been associated with the authority by virtue of paragraph (b) or paragraph (c) of subsection (5)above;

(c)he is at that time the spouse of, or carries on business in partnership with, a person who is associated with the authority by virtue of subsection (5)(a) above; or

(d)he holds a relevant office in a political association or other body which, in the nomination paper of a person who is an elected member of the authority, formed part of that person’s description.

(7)For the purposes of subsection (6)(d) above, an office in a political association or body is relevant to a local authority in the following circumstances—

(a)if the association or body is active only in the area of the local authority, any office in it is relevant; and

(b)in any other case, an office is relevant only if it is in a branch or other part of the association or body which is active in the area of the local authority.

(8)In relation to a company which is an industrial and provident society, any reference in this section to the directors of the company is a reference to the members of the committee of management.

(9)Subject to subsections (4) and (8) and section 67 above, expressions used in this section have the same meaning as in the M112Companies Act 1985.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Modifications etc. (not altering text)

C83S. 69 applied (with modifications) (11.3.1996) by S.I. 1996/330, reg. 9(2)

Commencement Information

I4S. 69 wholly in force at 7.10.1993; s. 69 not in force at Royal Assent see s. 195(2); s. 69 in force for certain purposes at 16.1.1990 by S.I.1989/2445, art. 4; s. 69 in force so far as not already in force at 7.10.1993 by S.I. 1993/2410, art. 3

Marginal Citations

70 Requirements for companies under control or subject to influence of localauthorities.E+W

(1)In relation to companies under the control of local authorities and companies subject to the influence of local authorities, the Secretary of State may by order make provision regulating, forbidding or requiring the taking of certain actions or courses of action; and an order under this subsection may—

(a)make provision in relation to those companies which are arm’s length companies different from that applicable to companies which are not; and

(b)make provision in relation to companies under the control of local authorities different from that applicable in relation to companies under the influence of local authorities.

(2)It shall be the duty of every local authority to ensure, so far as practicable, that any company under its control complies with the provisions for the time being made by order under subsection (1) above; and if a local authority fails to perform that duty in relation to any company, any payment made by the authority to that company and any other expenditure incurred bythe authority in contravention of any such provisions shall be deemed for the purposes of [F139the Audit Commission Act 1998] to be expenditure which is unlawful.

(3)In order to secure compliance, in relation to companies subject to the influence of local authorities, with provisions made by virtue of subsection (1) above, an order under that subsection may prescribe requirements to be complied with by any local authority in relation to conditions to be included in such leases, licences, contracts, gifts, grants or loans as may be so prescribed which are made with or to a company subject to the influence of the local authority.

(4)It shall be the duty of every local authority to comply with any requirements for the time being prescribed under subsection (3) above; and if a local authority fails to perform that duty, any expenditure which is incurred by the local authority under the lease, licence, contract, gift, grant or loan in question shall be deemed for the purposes of [F140the Audit Commission Act 1998] to be expenditure which is unlawful.

(5)Without prejudice to the generality of the power conferred by subsection (1) above, an order under that subsection may make provision requiring acompany or local authority to obtain the consent of the Secretary of State,or of the Audit Commission for Local Authorities in England and Wales, before taking any particular action or course of action.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Amendments (Textual)

F139Words in s. 70(2) substituted (11.9.1998) by 1998 c. 18, ss. 54(1), 55(2), Sch. 3 para. 18(3)(a)

F140Words in s. 70(4) substituted (11.9.1998) by 1998 c. 18, ss. 54(1), 55(2), Sch. para. 18(3)(b)

Commencement Information

I5S. 70 wholly in force at 7.10.1993; s. 70 not in force at Royal Assent see s. 195(2); s. 70 in force for certain purposes at 16.1.1990 by S.I.1989/2445, art. 4; s. 70 in force so far as not already in force at 7.10.1993 by S.I.1993/2410, art. 3

71 Control of minority interests etc. in certain companies.E+W

(1)In relation to a local authority, subsection (2) below applies to any company other than—

(a)a company which is or, if the action referred to in that subsection is taken, will be under the control of the local authority; and

(b)a company of a description specified for the purposes of this section by an order made by the Secretary of State;

and in this section an “authorised company” means a company falling within paragraph (b) above.

(2)Except with the approval of the Secretary of State, in relation to acompany to which this subsection applies, a local authority may not—

(a)subscribe for, or acquire, whether in their own name or in the name of a nominee, any shares or share warrants in the company;