1Subject to paragraph 3 below, the amount of the needs element payable for any year to a local authority shall be the aggregate of—
(a)an amount arrived at by multiplying a prescribed sum by the population of the authority's area ; and
(b)additional amounts determined in such manner as may be prescribed and attributable to such additional factors as may be prescribed for that year.
2For the purposes of paragraph 1 above the Secretary of State may by regulations provide for the method of determining, for any year,—
(a)the population of a local authority's area; and
(b)the application or operation of any additional prescribed factor in relation to a local authority.
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.
4If, when the needs element for any year falls to be paid, it appears to the Secretary of State that the aggregate amount of that element will exceed or fall short of its aggregate amount as fixed by the relevant rate support grant order, the Secretary of State shall adjust the amount of that element payable to each local authority as nearly as may be in the proportion which the aggregate amount of the element as so fixed bears to the amount, as estimated by the Secretary of State, which would be the aggregate amount of that element for that year apart from this paragraph.