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Infrastructure (Financial Assistance) Act 2012

Commentary

6.Section 1 provides that there may be paid out of money provided by Parliament expenditure incurred by the Treasury or, with the Treasury’s consent, the Secretary of State in giving, or in connection with giving, guarantees and other suitable forms of financial assistance to any person in respect of the provision of UK infrastructure. Section 1 also provides a non-exhaustive list of matters that fall within the definition of “infrastructure”. Section 1 further provides that where expenditure is required under the terms of an agreement for financial assistance and the Treasury is satisfied that arrangements cannot reasonably be made for the expenditure to be paid out of money provided by Parliament, for example because of timing imperatives imposed by the terms of the agreement, then the Treasury may make a payment out of the Consolidated Fund. Where the Treasury makes a payment out of the Consolidated Fund it must lay a report before Parliament specifying the amount that has been paid out of the Consolidated Fund. Section 1 makes it clear that the authorisation under this Act does not apply in relation to financial assistance given under a statutory power. It also makes clear, through the introduction of the concept of “infrastructure expenditure”, that the limit on the maximum amount of expenditure that may be incurred under Section 2, and the reporting requirements in Section 3, do not apply in relation to expenditure incurred in reliance on authorisation other than that conferred by the Act – for example, where it is appropriate to rely on the sole authority of supply legislation (which might be the case where departmental expenditure on financial assistance was no more that £1.5 million a year, or was expected to last for no more than two years).

7.Section 2 provides that the maximum amount of expenditure and actual or contingent liabilities incurred in giving, or in connection with giving, infrastructure assistance , less any sums received by the Treasury or the Secretary of State in connection with infrastructure assistance, must not at any time exceed £50,000 million. The Treasury has an order-making power under subsection (4) to increase the maximum amount of expenditure that the Treasury and Secretary of State may incur in giving, or in connection with giving, infrastructure assistance. There are no limits on the number of occasions when the maximum amount that may be incurred in giving, or in connection with giving, infrastructure assistance may be increased or on the amount by which the maximum amount may be increased on each occasion. Expenditure incurred by the Treasury or the Secretary of State in reliance on any authorisation other than that conferred by Section 1 does not count in the calculation of this maximum amount.

8.Section 3 provides that the Treasury is under a duty to report to the House of Commons at twelve monthly intervals, starting on 31 March 2013. The details required to be included in the reports are listed in subsection (3). Subsection (4) provides that the report must also include arrangements entered into before Royal Assent. The effect of subsection (5) is that a report is not required for a reporting period if there is nothing to report at the end of that period.

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