3(1)The needs element shall be subject to adjustment, in accordance with the following provisions of this paragraph, in respect of expenditure to which this paragraph applies.
(2)The Secretary of State may by regulations provide for ascertaining the aggregate of the expenditure to which this paragraph applies of all local authorities, for apportioning the aggregate among the authorities and for ascertaining the amount by which the needs element payable to each authority ought to be increased or decreased.
(3)The Secretary of State shall, in accordance with regulations made by him under this paragraph, ascertain at such time as may be specified by the regulations—
(a)the estimated amount of the increases and decreases of the needs element which ought to be made for any year, and
(b)the actual amount of those increases and decreases,
and he shall in paying the needs element for any year adjust the amount of that element in accordance with the estimated amounts so ascertained and shall in paying that element for the earliest practicable subsequent year make any adjustment necessary to offset differences between the estimated and actual amounts so ascertained.
(4)Subject to sub-paragraph (5) below, this paragraph applies to expenditure incurred—
(a)in establishing, maintaining or assisting colleges or other institutions for the training of teachers or in providing or assisting the provision of other facilities specified in directions under section 62 of the [1944 c. 31.] Education Act 1944;
(b)in making payments, in such cases as may be specified by regulations made by the Secretary of State under this paragraph, to or in respect of persons taking teachers' training or further training courses;
(c)in the provision, or in assisting the provision, of such facilities for further education of an advanced character as may be specified by or under regulations so made;
(d)in the making of provision for primary, secondary or further education of pupils not belonging to the area of any local education authority;
(e)in the training of persons to undertake educational research or to become educational psychologists, or in respect of persons who are being so trained.
(5)The Secretary of State may by regulations provide—
(a)that this paragraph shall apply to such expenditure as may be specified by the regulations which is incurred by local authorities—
(i)upon research into any of their functions, or
(ii)in the training of persons in matters connected with the functions of local authorities, or
(iii)in respect of persons to whom the training is given, or
(iv)in providing, for persons who suffer from any disability of mind or body, education by special methods appropriate for persons suffering from that disability, or
(v)in making payments to persons who cease to be employed as teachers in colleges for the training of teachers and become employed either by a local authority in a different capacity or as teachers in voluntary schools; or
(b)that any expenditure to which this paragraph applies shall cease to be such expenditure.