Part 1

Capital finance etc and accounts
Chapter 1

Capital finance etc

Borrowing

Imposition of borrowing limits
4
1
The Secretary of State may for national economic reasons by regulations set limits in relation to the borrowing of money by local authorities.
2
The Secretary of State may by direction set limits in relation to the borrowing of money by a particular local authority for the purpose of ensuring that the authority does not borrow more than it can afford.
3
Different limits may be set under subsection (1) or (2) in relation to different kinds of borrowing.
4
A local authority subject to a limit set under subsection (1) may transfer any headroom it has in relation to the limit to another local authority subject to a corresponding limit.
5
The Secretary of State may by regulations make provision about the exercise of the right under subsection (4) and may, in particular, make provision about—
a
the circumstances in which a local authority is to be regarded as having headroom for the purposes of that subsection, and
b
the amount of headroom which it has for those purposes.
6
Where an amount is transferred under subsection (4), this Chapter shall have effect—
a
in relation to the transferor, as if the limit in relation to which the headroom exists were reduced by that amount, and
b
in relation to the transferee, as if the corresponding limit to which it is subject were increased by that amount.