The Local Authorities (Capital Finance) Regulations 1997

PART 4 INTEREST SAVINGS AND THE AMOUNT IN RESPECT OF INTEREST

6.  Subject to paragraph 8, for the purposes of Part 2 of this Schedule, the amount of the authority’s interest savings for the current year shall be determined in accordance with the formula—

where—

• “D” and “MC” have the same meanings as in paragraph 4; and

• “DI” is the aggregate of the amounts calculated in accordance with paragraph 7.

7.  In order to calculate item “DI” in the formula in paragraph 6, the authority shall calculate for each relevant debt an amount equal to the percentage of the debt which was chargeable by way of interest on the debt on the date on which the debt was reduced or extinguished by a commuted payment.

8.  The authority’s interest savings for the current year may be nil but shall not be a negative amount.

9.  Subject to paragraph 10, for the purposes of Part 2 of this Schedule, the amount in respect of interest for the current year shall be determined in accordance with the formula—

where—

• “S” is the total amount set aside by the authority under section 63(2) as provision to meet credit liabilities in respect of any commuted payments paid to them under section 157(1)(a);

• “T” is the total amount which, at any time before the beginning of the current year, has been applied by the authority under section 64(2) for the purpose mentioned in regulation 157(1); and

• “R” is a rate of interest which is expressed as a percentage with no more than three decimal places, and is equal to 0.125 per cent. less than the arithmetical mean of the London Inter-Bank Bid rates of interest for three month deposits published during the last year, at monthly intervals, by The Stationery Office.

10.  The amount in respect of interest for the current year may be nil but shall not be a negative amount.