(1)For the purposes of this Chapter, a local authority shall be taken to have entered into a credit arrangement where—
(a)it enters into a transaction which gives rise to a liability on its part, and
(b)the liability is a qualifying liability.
(2)A transaction entered into by a local authority is to be taken for the purposes of subsection (1) as giving rise to a liability on the part of the authority if—
(a)it falls in accordance with proper practices to be treated for the purposes of the authority’s accounts as giving rise to such a liability, or
(b)it falls in accordance with regulations made by the Secretary of State to be treated as falling within paragraph (a).
(3)The reference in subsection (1)(b) to a qualifying liability is to any liability other than—
(a)a liability to repay money,
(b)a liability in respect of which the date for performance is less than 12 months after the date on which the transaction giving rise to the liability is entered into, and
(c)a liability of a description specified for the purposes of this provision by regulations made by the Secretary of State.