Subject to paragraphs (2) and (5), the constituent councils must ensure that the costs of the Combined Authority reasonably attributable to the exercise of its functions are met.

Subject to paragraph (4), the constituent councils must meet the costs of the expenditure reasonably incurred by the Mayor in, or in connection with, the exercise of the functions referred to in article 27(1), to the extent that the Mayor has not decided to meet these costs from other resources available to the Combined Authority.

Any amount payable by each of the constituent councils to ensure that the costs of the Combined Authority referred to in paragraphs (1) and (2) are met is to be determined by apportioning such costs between the constituent councils in such proportions as they may agree or, in default of such agreement, in accordance with the proportion of the total resident population of the Combined Authority which resides in the area of each constituent council at the relevant date as estimated by the Statistics Board.

The costs of the Combined Authority reasonably attributable to the exercise of its functions relating to transport must be met by means of a levy issued by the Combined Authority to the constituent councils under section 74 of the Local Government Finance Act 1988 and in accordance with the Transport Levying Bodies Regulations 1992 M2.

For the purposes of paragraph (3) the relevant date in relation to a payment for a financial year is 30th June in the financial year which commenced two years prior to the financial year in which such payment is made.