85Calculation of component and consolidated budget requirements
(1)Section 43 of the [1992 c. 14.] Local Government Finance Act 1992 shall not apply in relation to the Authority, and the following provisions of this section and section 86 below shall have effect in relation to the Authority in place of that section.
(2)In relation to each financial year, the Authority shall make the calculations required by this section.
(3)The Authority must, in the case of each constituent body, that is to say—
(a)the Authority, and
(b)each of the functional bodies,
calculate the aggregates required by virtue of subsections (4) and (5) below.
(4)The aggregate required by virtue of this subsection in the case of a constituent body is the aggregate of—
(a)the expenditure the Authority estimates the body will incur in the year in performing its functions and will charge to a revenue account for the year, other than expenditure which the Authority estimates will be so incurred in pursuance of regulations under section 99(3) of the 1988 Act;
(b)such allowance as the Authority estimates will be appropriate for contingencies in relation to expenditure to be charged to a revenue account for the year;
(c)the financial reserves which the Authority estimates it will be appropriate for the body to raise in the year for meeting the body’s estimated future expenditure; and
(d)such of the body’s financial reserves as are sufficient to meet so much of the amount estimated by the Authority to be a revenue account deficit of the body for any earlier financial year as has not already been provided for.
(5)The aggregate required by virtue of this subsection in the case of a constituent body is the aggregate of—
(a)the sums which the Authority estimates will be payable to the body for the year and in respect of which amounts will be credited to a revenue account for the year, other than sums which the Authority estimates will be so payable—
(i)in respect of redistributed non-domestic rates, revenue support grant, additional grant, relevant special grant, police grant or general GLA grant;
(ii)in respect of any precept issued by the Authority; or
(iii)in pursuance of regulations under section 99(3) of the [1988 c. 41.] Local Government Finance Act 1988; and
(b)the amount of the body’s financial reserves which the Authority estimates that the body will use in order to provide for the items mentioned in paragraphs (a) and (b) of subsection (4) above.
(6)If, in the case of any constituent body, the aggregate calculated under subsection (4) above exceeds that calculated under subsection (5) above—
(a)the Authority must calculate the amount equal to the difference; and
(b)the amount so calculated shall be the body’s component budget requirement for the year.
(7)If, in the case of any constituent body, the aggregate calculated under subsection (4) above does not exceed that calculated under subsection (5) above, the body’s component budget requirement for the year shall be nil.
(8)The Authority must also calculate the aggregate of the component budget requirements of each of the constituent bodies and that aggregate shall be the Authority’s consolidated budget requirement for the year.
(9)References in this section to expenditure incurred by a body shall be construed in accordance with section 41(3) of the [1989 c. 42.] Local Government and Housing Act 1989.