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Local Government and Housing Act 1989

Status:

This is the original version (as it was originally enacted).

Sections 56, 58, 62 and 63.

SCHEDULE 3Provisions Supplementing Part IV

Part IEffect of Overspend in 1989-90 on Credit Approvals

1(1)If Part VIII of the [1980 c. 65.] Local Government, Planning and Land Act 1980 (in this Part of this Schedule referred to as “the 1980 Act”) applied to the prescribed expenditure of a local authority for the financial year 1989-90, it shall be determined whether—

(a)the total of the payment, made (or treated as made) in respect of that prescribed expenditure exceeded

(b)the aggregate of the amounts which, in relation to that authority, fell within paragraphs (a) to (e) of subsection (3) of section 72 of the 1980 Act for that financial year.

(2)If for any local authority there is such an excess as is referred to in sub-paragraph (1) above, it is in the following provisions of this Part of this Schedule referred to as the “1989-90 overspend” of the authority.

2(1)Where a local authority have a 1989-90 overspend, their basic credit approval for the financial year 1990-91 shall be taken to be reduced or, as the case may be, extinguished by deducting from the approval an amount equal to the overspend.

(2)Any reduction or extinguishment of an authority’s basic credit approval under this paragraph shall be regarded as taking place immediately after the approval is received by the authority.

3(1)If a local authority’s 1989-90 overspend exceeds their basic credit approval for the financial year 1990-91 (so that that approval is extinguished) the excess shall be applied in reduction (or extinguishment) of other basic credit approvals issued to the authority in the order in which they are received by the authority until the whole of the excess is so applied.

(2)Any reduction or extinguishment of an authority’s basic credit approval under this paragraph shall be regarded as taking place immediately after the approval is received by the authority.

4Not later than 30th September 1990, each local authority to the prescribed expenditure of which Part VIII of the 1980 Act applied for the financial year 1989-90 shall determine the amount of their 1989-90 overspend (if any).

5In this Part of this Schedule—

(a)“prescribed expenditure” has the same meaning as in Part VIII of the 1980 Act; and

(b)“the financial year 1989-90” means the financial year beginning on 1st April 1989 and “the financial year 1990-91” means that beginning on 1st April 1990.

Part IINon-Monetary Consideration received before April 1990

6This Part of this Schedule applies in any case where—

(a)within the period beginning on 2nd February 1989 and ending on 31st March 1990 a local authority receive any consideration in respect of a disposal or the right to a repayment or payment; and

(b)the disposal occurs or the right to a repayment or payment arises on or after 2nd February 1989; and

(c)if the consideration were received on 1st April 1990, section 61 of this Act would apply in relation to it.

7(1)On the assumption that the consideration falling within paragraph 6 above was received by the local authority on 1st April 1990, there shall be determined, in accordance with section 61 of this Act, the amount of the notional capital receipt referable to the consideration and, from that, there shall be deducted so much (if any) of the consideration as is in money and is paid within the period referred to in paragraph 6(a) above.

(2)If the amount determined under sub-paragraph (1) above (“the non-monetary consideration”) exceeds the payments (if any) in respect of prescribed expenditure which, in the case in question, the local authority are taken to make for the purposes of Part VIII of the [1980 c. 65.] Local Government, Planning and Land Act 1980, the local authority shall set aside, as provision to meet credit liabilities, the amount specified in sub-paragraph (3) below and that amount shall be so set aside on 1st April 1990 or, if it is later, at the time of the disposal or the assignment or waiver of the repayment or payment in question.

(3)Except in so far as regulations made or directions given by the Secretary of State otherwise provide, the amount referred to in sub-paragraph (2) above is that which, under section 59 of this Act, would be the reserved part of a capital receipt which—

(a)is of an amount equal to the excess referred to in that sub-paragraph; and

(b)is received in respect of a disposal or a right to a repayment or payment of the description in question.

Part IIICredit Ceiling

8(1)Subject to any prescribed modifications, the credit ceiling of a local authority at 1st April 1990 (in this Schedule referred to as the authority’s “initial credit ceiling”) is the amount by which the aggregate of—

(a)so much of any advances made before that date from a loans fund established by the authority under paragraph 15 of Schedule 13 to the [1972 c. 70.] Local Government Act 1972 as has not been repaid before that date, and

(b)the total cost of the authority’s transitional credit arrangements, as defined in section 52 of this Act, less such (if any) as may be excluded from this paragraph by regulations made by the Secretary of State,

exceeds the total of the receipts which the authority are required to bring into account under paragraph 9 below; and, if there is no such excess, the authority’s initial credit ceiling shall be nil or, as the case may be, a negative amount.

(2)In sub-paragraph (1) above “prescribed” means prescribed by regulations made by the Secretary of State.

9(1)Subject to sub-paragraph (2) below, the receipts which a local authority are required to bring into account to determine their initial credit ceiling are the following 1980 Act receipts, namely,—

(a)those which on 1st April 1990 are required to be set aside as provision to meet credit liabilities; and

(b)those which, on or before 30th September 1990, the authority determine, in accordance with section 60(2) of this Act, to set aside as provision to meet credit liabilities.

(2)A local authority are not under sub-paragraph (1) above required to bring into account so much of any capital receipt as, in accordance with section 50(3) of this Act, is applied by the authority as provision to meet credit liabilities unless it is so applied in relation to a credit arrangement excluded by regulations under paragraph 11 below.

10(1)At any time on or after 1st April 1990, a local authority’s credit ceiling shall be determined, subject to any prescribed modifications, in accordance with the following provisions of this Part of this Schedule.

(2)In sub-paragraph (1) above “prescribed” means prescribed by regulations made by the Secretary of State.

11(1)If, at any time on or after 1st April 1990, a credit approval is used by a local authority to any extent as mentioned in section 56(3) of this Act, then, subject to sub-paragraph (2) below, the authority’s credit ceiling shall at that time be increased by an amount equal to the extent to which the credit approval is so used.

(2)If, in reliance on a credit approval, a local authority enter into or agree to the variation of a credit arrangement of a description excluded by regulations made by the Secretary of State under this paragraph, no account shall be taken under sub-paragraph (1) above of that use of the credit approval.

12(1)If, at any time on or after 1st April 1990, a local authority set aside an amount as provision to meet credit liabilities (whether or not pursuant to a requirement to do so) then, subject to sub-paragraph (2) below, the authority’s credit ceiling shall at that time be reduced by an amount equal to the amount so set aside (and, by virtue of this paragraph, that ceiling may, accordingly, be a negative amount).

(2)This paragraph does not apply with respect to—

(a)an amount which, in relation to a credit arrangement, other than one excluded by regulations under paragraph 11 above, is applied or charged (as an amount of credit cover) as mentioned in paragraph (b) or paragraph (c) of subsection (3) of section 50 of this Act; or

(b)a 1980 Act receipt which, in accordance with paragraph 9 above, is brought into account to determine the authority’s initial credit ceiling; or

(c)so much of an amount set aside under section 63 of this Act as provision to meet credit liabilities as (in accordance with Part IV of this Schedule) is referable to notional interest on credit arrangements.

(3)For the purposes of this paragraph, an amount set aside under subsection (1) of section 63 of this Act in respect of any financial year shall be treated as set aside on the last day of that year.

13If, at any time on or after 1st April 1990 a local authority apply or transfer under subsection (2) of section 64 of this Act an amount set aside as mentioned in subsection (1) of that section, the authority’s credit ceiling shall at that time be increased by an amount equal to the amount so applied or transferred.

14(1)If, at any time on or after 1st April 1990, any debt of a local authority is reduced or extinguished by virtue of such a payment as is referred to in section 157(1)(b) of this Act, the authority’s credit ceiling shall at that time be reduced by an amount equal to the reduction in the debt or, as the case may be, to the amount of the extinguished debt (and, by virtue of this paragraph, the credit ceiling may, accordingly, be a negative amount).

(2)If, at any time on or after 1st April 1990, a local authority are required under section 157(7)(b) of this Act to repay or pay any sum to the Secretary of State, the authority’s credit ceiling shall at the time that sum is repaid or paid be increased by an amount equal to that sum.

Part IVMinimum Revenue Provision

15(1)Subject to sub-paragraphs (2) and (3) below, for any financial year other than that beginning on 1st April 1990, a local authority’s minimum revenue provision shall be the aggregate of—

(a)an amount in respect of principal which, except in so far as regulations made by the Secretary of State otherwise provide, shall be the prescribed percentage of the authority’s adjusted credit ceiling on the last day of the immediately preceding year; and

(b)an amount in respect of notional interest on each credit arrangement entered into by the authority which came into being before the beginning of that year, other than an arrangement excluded by regulations under paragraph 11 above.

(2)If a local authority’s credit ceiling on the last day of a financial year is nil or a negative amount, the authority’s minimum revenue provision for the immediately following financial year shall be nil.

(3)In the case of a credit arrangement falling within section 49(3) of this Act, the Secretary of State may by regulations provide that the amount referred to in sub-paragraph (1)(b) above is nil.

16(1)Subject to sub-paragraphs (2) and (3) below, for the financial year beginning on 1st April 1990, a local authority’s minimum revenue provision shall be the aggregate of—

(a)an amount in respect of principal which, except in so far as regulations made by the Secretary of State otherwise provide, shall be the prescribed percentage of the authority’s adjusted initial credit ceiling; and

(b)an amount in respect of notional interest on each transitional credit arrangement entered into by the authority, other than an arrangement excluded by regulations under paragraph 11 above.

(2)If a local authority’s initial credit ceiling is nil or a negative amount, the authority’s minimum revenue provision for the financial year referred to in sub-paragraph (1) above shall be nil.

(3)In the case of a transitional credit arrangement falling within section 49(3) of this Act, the Secretary of State may by regulations provide that the amount referred to in sub-paragraph (1)(b) above is nil.

17In paragraphs 15(1)(a) and 16(1)(a) above “the prescribed percentage” means such percentage, which may be any percentage from nil to 100, as may be prescribed by regulations made by the Secretary of State; and different percentages may be so prescribed in relation to different amounts taken into account in determining an authority’s adjusted credit ceiling or initial credit ceiling.

18(1)Any reference in this Part of this Schedule to an authority’s adjusted credit ceiling at any time or their adjusted initial credit ceiling is a reference to their credit ceiling or, as the case may be, initial credit ceiling, determined in accordance with Part III of this Schedule as modified, in such manner as the Secretary of State considers appropriate, by regulations made by him for the purposes of this Part of this Schedule.

(2)Without prejudice to the generality of sub-paragraph (1) above, for the purpose of determining an authority’s adjusted credit ceiling or adjusted initial credit ceiling at any time, regulations under this paragraph may require amounts which are taken into account in determining the authority’s credit ceiling or initial credit ceiling to be treated as having been repaid, in whole or in part, by reference to amounts set aside as provision for credit liabilities and also, in such cases as may be specified in the regulations, may require a local authority to determine which of the amounts so taken into account are to be treated as so repaid.

19(1)Subject to paragraphs 15(3) and 16(3) above, for any financial year, the amount referred to in paragraph 15(1)(b) or paragraph 16(1)(b) above in respect of notional interest on a credit arrangement is that determined by the formula—

where, subject to sub-paragraphs (2) and (3) below,—

  • “a” is the cost of the arrangement on 1st April in that financial year; and

  • “b” is the percentage rate of discount prescribed under section 49(2) of this Act for the financial year in which the arrangement came into being or, in the case of a transitional credit arrangement, for the financial year beginning on 1st April 1990.

(2)In the case of a credit arrangement which has been varied as mentioned in section 51(1) of this Act, “b” in the formula in sub-paragraph (1) above is the percentage rate of discount prescribed under section 49(2) of this Act for the financial year in which the arrangement was so varied or, as the case may be, last varied.

(3)In the case of a credit arrangement falling within section 49(3) of this Act, the Secretary of State may by regulations provide that “b” in the formula in sub-paragraph (1) above shall be such figure as may be specified in, or determined under, the regulations.

20Regulations under this Part of this Schedule—

(a)may make provision by reference to amounts determined by local authorities in respect of particular financial years; and

(b)may require such determinations to be made within such time limits as may be specified in the regulations.

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