Local Government Act 1985

PART II Consequences of Contravention

2 (1) If in contravention of the principal section the Greater London Council or a metropolitan county council makes a grant to a local authority, enters into any agreement or arrangements for giving relevant assistance to a local authority or gives relevant assistance to a local authority—

(a) the appropriate residuary body shall be entitled to recover from that local authority on demand—

(i) an amount equal to the grant or to the value of the relevant assistance given or to be given under the agreements or arrangements at any time after 24th July 1984 and before the abolition date ; and

(ii) interest on that amount; and

(b) any sums payable by that local authority (whether before, on or after the abolition date) in consequence of a demand under paragraph (a) above shall be treated for the purposes of section 54(5) of the [1980 c. 65.] Local Government, Planning and Land Act 1980 as relevant expenditure of the authority for the financial year ending on 31st March 1986.

(2) A residuary body shall not make any demand for or take any steps to recover any amount payable under this paragraph unless directed to do so by the Secretary of State or otherwise than in accordance with his directions.

(3) A contravention of the principal section shall have no consequences other than those specified in this paragraph and accordingly shall not affect the validity of any grant, agreement or arrangements or of anything done under any agreement or arrangements.

3 For the purpose of determining the amount recoverable under paragraph 2 above in respect of any relevant assistance, the value of that assistance shall be taken to be—

(a) in the case of a payment, an amount equal to the payment;

(b) in a case within paragraph 1(1)(a), (b), (c) or (d) above, such amount as the local authority would have had to pay on the open market in order, at the material time, to secure the carrying out of the works, or to obtain the goods or services or the use of the vehicle, plant or apparatus in question.

4 The Secretary of State may direct a local authority from which an amount in respect of relevant assistance is recoverable under paragraph 2 above to determine the value of that assistance in accordance with paragraph 3 above ; and if the authority reports the result of its determination within such time as is specified in the direction and the Secretary of State is satisfied with that determination it shall be conclusive evidence of that value.

5 (1) Where the value of any relevant assistance is not conclusively determined under paragraph 4 above it shall be determined in accordance with paragraph 3 above by a person appointed for that purpose by the Secretary of State, being a person who is not in the service of the Crown and has such qualifications as appear to the Secretary of State to be appropriate ; and the determination of that person shall be conclusive evidence of that value.

(2) The local authority by which the relevant assistance was received shall repay to the Secretary of State the amount of any fee payable by him to the person appointed under this paragraph to determine the value of that assistance ; and if any such amount is not paid the Secretary of State may direct the appropriate residuary body to recover it from the local authority and it shall be recoverable from that authority accordingly.

6 The interest recoverable under paragraph 2 above in respect of any grant made or relevant assistance given to a local authority shall accrue from the date on which the grant is made or, as the case may be, the assistance or any part of it is first received by the authority and shall be at such rate as the Secretary of State may determine ; and different rates may be determined in respect of interest accruing at different periods.