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Local Government and Housing Act 1989

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  • Act modified by S.I. 2008/3002 art. 7 (This amendment comes into force on the day 2008 c. 4, s. 5 comes into force, see art. 1(2). That provision was brought into force on 1.12.2008 by S.I. 2008/3068, art. 2(1)(b))
  • Blanket amendment words substituted by S.I. 2011/1043 art. 3 6

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Commencement Orders yet to be applied to the Local Government and Housing Act 1989

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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)

C1S. 40 applied (19.6.1997) by 1997 c. 25, ss. 72(1), 74(1)

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