4. After regulation 24A of the 2003 Regulations (back payment following unequal pay)(1), insert —
24B.—(1) Subject to paragraph (2), this regulation applies where—
(a)a local authority repays a loan of money before 1st April 2007 and before the date on which the local authority is required, in accordance with the terms of the loan, to fully repay the whole or the remaining part of it;
(b)as a consequence of such early repayment—
(i)the local authority is required to pay a premium to the lender of the loan or is required, in accordance with proper practices, to account for a amount in respect of a premium as if it were required to pay such a premium; or
(ii)the lender of the loan gives the local authority a discount on the loan or the authority is required, in accordance with proper practices, to account for an amount in respect of a discount as if the lender had given the local authority such a discount; and
(c)an amount in respect of the premium or discount, as the case may be, included, in accordance with proper practices, in the local authority’s balance sheet at the beginning of the 2007 financial year is less than the amount so included immediately before the 2007 financial year.
(2) This regulation does not apply in relation to an amount in respect of a discount where a local authority credited the total amount of the discount to a revenue account, before the date on which this regulation comes into force, in accordance with proper practices or with proper accounting practices which the local authority was required to follow at that time.
(3) Where this regulation applies, in each relevant year, the amount that a local authority must charge to a revenue account for that financial year in respect of the premium or credit to a revenue account for that financial year in respect of the discount, as the case may be—
(a)in the case of a premium, is an amount which is the same as or greater than the amount calculated in accordance with the formula specified in paragraph (4);
(b)in the case of a discount, is an amount which is the same as or less than the amount calculated in accordance with that formula.
(4) The formula specified for the purposes of paragraph (3) is—
No math image to display
(5) In this regulation—
“2007 financial year” means the financial year which begins on 1st April 2007;
“A” is the amount in respect of a premium or discount, as the case may be, included in the local authority’s balance sheet immediately before the 2007 financial year less the amount in respect of the premium or discount included in the local authority’s balance sheet at the beginning of the 2007 financial year;
“B” is the total of—
in the case of a premium—
any amounts charged to a revenue account before the current year, by virtue of this regulation, in respect of the premium; and
any capital receipts used on or after 1st April 2007 to pay any part of the premium;
in the case of a discount, any amounts credited to a revenue account before the current year, by virtue of this regulation, in respect of the discount;
“C” is the number of financial years from the current year to the final year inclusive;
“amount” includes a nil amount;
“current year” means the financial year for which the local authority is calculating the amount to charge or credit to its revenue account in accordance with this regulation;
“final year” means—
in the case of a premium—
the financial year in which the whole or the remaining part of the loan would have been due to be fully repaid in accordance with the terms of the loan if the loan had not been repaid before that financial year; or
if later, the financial year in which the whole or the remaining part of any replacement loan (or, if more than one, the replacement loan which is due to be fully repaid last) is due to be fully repaid in accordance with the terms of the replacement loan;
in the case of a discount—
the financial year in which the whole or the remaining part of the loan would have been due to be fully repaid in accordance with the terms of the loan if the loan had not been repaid before that financial year; or
if earlier, the financial year which ends on 31st March 2016;
“relevant year” means the 2007 financial year and each subsequent financial year until, and including, the final year; and
“replacement loan” means any loan of money to the local authority some or all of which the local authority treats, for accounting purposes, as a replacement for some or all of the loan referred to in sub-paragraph (a) of paragraph (1).
24C.—(1) This regulation applies where—
(a)a local authority repays a loan of money on or after 1st April 2007 but before the date on which the local authority is required, in accordance with the terms of the loan, to fully repay the whole or the remaining part of it;
(b)as a consequence of such early repayment—
(i)the local authority is required to pay a premium to the lender of the loan; or
(ii)the lender of the loan gives the local authority a discount on the loan; and
(c)the local authority is not required, in accordance with proper practices, to include an amount in respect of the premium or the discount, as the case may be, in the local authority’s balance sheet on or after 1st April 2007.
(2) Where this regulation applies, in the initial year and in each subsequent financial year until, and including, the final year, the amount that the local authority must charge to a revenue account for that financial year in respect of the premium or credit to a revenue account for that financial year in respect of the discount, as the case may be—
(a)in the case of a premium, is an amount which is the same as or greater than the amount calculated in accordance with the formula specified in paragraph (3);
(b)in the case of a discount, is an amount which is the same as or less than the amount calculated in accordance with that formula.
(3) The formula specified for the purposes of paragraph (2) is—
No math image to display
(4) In this regulation—
“D” is the amount of the premium or the amount of the discount, as the case may be;
“E” is the total of—
in the case of a premium—
any amounts charged to a revenue account before the current year, by virtue of this regulation, in respect of the premium; and
any capital receipts used to pay any part of the premium;
in the case of a discount, any amounts credited to a revenue account before the current year, by virtue of this regulation, in respect of the discount;
“F” is the number of financial years from the current year to the final year inclusive;
“amount” includes a nil amount;
“current year” means the financial year for which the local authority is calculating the amount to charge or credit to its revenue account in accordance with this regulation;
“final year”—
in the case of a premium, has the same meaning as in sub-paragraph (a) of the definition of “final year” in regulation 24B;
in the case of a discount, means—
the financial year in which the whole or the remaining part of the loan would have been due to be fully repaid in accordance with the terms of the loan if the loan had not been repaid before that financial year; or
if earlier, the ninth financial year after the initial year (counting consecutively the financial years immediately following the initial year); and
“initial year” means the financial year in which the loan is repaid.
24D.—(1) Paragraph (3) applies where—
(a)on or after 1st April 2007, a local authority gives a loan to a person;
(b)the local authority, in accordance with proper practices, includes an amount in respect of that loan in its balance sheet at the end of the financial year in which the loan is given (“the loan year”); and
(c)the amount referred to in sub-paragraph (b) is less than the amount of the loan outstanding at the end of the loan year.
(2) Paragraph (3) applies where—
(a)a local authority gave a loan to a person before 1st April 2007 and the whole or any remaining part of the loan is outstanding on or after 1st April 2007;
(b)the local authority, in accordance with proper practices, includes an amount in respect of that loan in its balance sheet at the end of the financial year which began on 1st April 2007 (“the 2007 financial year”); and
(c)the amount referred to in sub-paragraph (b) is less than the amount of the loan outstanding at the end of the 2007 financial year.
(3) Where this paragraph applies, the amount of the interest, if any, in respect of the loan which the local authority credits to its revenue account—
(a)(i)where the loan was given on or after 1st April 2007, in the loan year; or
(ii)where the loan was given before 1st April 2007, in the 2007 financial year; and
(b)in each subsequent year until, and including, the financial year in which the whole or any remaining part of the loan is fully repaid,
is the amount of the interest, if any, which it is due to receive in that year in accordance with the loan agreement for that loan.”.
Regulation 24A of the 2003 Regulations is inserted by regulation 3(2) of these Regulations.