The Local Authorities (Companies) (Amendment) (England) Order 2001

Amendment of Order

2.—(1) The Local Authorities (Companies) Order 1995(1) shall be amended in accordance with paragraphs (2) to (4) below.

(2) In article 14 (application of Part IV: requirement for credit cover)—

(a) for paragraph (5) there shall be substituted the following paragraph—

“(5) For the purposes of this article, in relation to any financial year beginning on or after 1st April 2001, one or more of the following amounts, in any combination, constitutes an amount of credit cover—

(a) an amount which the authority determine to set aside from the usable part of the authority’s capital receipts or from a revenue account as provision to meet credit liabilities (being an amount over and above amounts required to be set aside by virtue of any other provision of Part IV);

(b) an amount by which the authority determine to treat as reduced the balance of a credit approval;

(c) an amount by which the authority determine to treat as reduced any credit cover provision designated in accordance with paragraph (8).”;

(b) after paragraph (7) there shall be added the following paragraph—

“(8) Where, in relation to any financial year ending on or after 31st March 2001, a basic credit approval having effect for that year is, pursuant to article 15, treated as increased by any amount, the authority may—

(a) where a determination under section 56(1) is made in respect of part only of that amount, designate all or part of the residue of that amount as credit cover provision; or

(b) where no determination under section 56(1) is made in respect of any part of that amount, designate all or part of that amount as credit cover provision.”

(3) In paragraph (1) of article 16 (liabilities of regulated companies)—

(a) for sub-paragraph (bb)(2) there shall be substituted the following—

“(bb) the company’s assets shall not be treated as reduced by the defraying, after the relevant date, of expenditure for any purpose, where that expenditure is defrayed from monies accumulated before the relevant date;”;

(b) for paragraph (i) of sub-paragraph (c) there shall be substituted the following—

“(i) any liability under a credit transaction (whether entered into by the company before, on or after the relevant date),”.

(4) In paragraph (5B) of article 16(3), for the words “paragraphs (5A) and (5B)” there shall be substituted the words “paragraphs (5) and (5A)”.

(1)

S.I. 1995/849 amended by S.I. 1996/621.

(2)

Sub-paragraph (bb) was inserted by S.I. 1996/621.

(3)

Paragraph (5B) was inserted by S.I. 1996/621.