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Local Government Act 2003

Type Public General Act

Publication 2003-09-18

Last updated 2026-03-26

State In force

Department Statute Law Database

Source legislation.gov.uk

articles Not indexed

Reform history JSON API

Part 1 — Capital finance etc and accounts

Chapter 1 — Capital finance etc

Borrowing

Local loans

1

A local authority may borrow money—

(a) for any purpose relevant to its functions under any enactment, or

(b) for the purposes of the prudent management of its financial affairs.

Calculation of non-domestic rating multiplier

2

(1) A local authority may not borrow money if doing so would result in a breach of—

(a) the limit for the time being determined by or for it under section 3, or

(b) any limit for the time being applicable to it under section 4 , or

(2) The Secretary of State may, in relation to specific borrowing by a particular local authority, by direction disapply subsection (1)(b), so far as relating to any limit for the time being applicable under section 4(1).

(3) A local authority may not, without the consent of the Treasury, borrow otherwise than in sterling.

(4) This section applies to borrowing under any power for the time being available to a local authority under any enactment, whenever passed.

Charging orders: aggregation

3

(1) A local authority shall determine and keep under review how much money it can afford to borrow.

(2) In the case of the following authorities, namely—

(a) the Greater London Authority, and

(b) a functional body,

the Mayor shall determine and keep under review how much money the authority can afford to borrow.

(3) Before making any determination under subsection (2), the Mayor shall consult the London Assembly.

(4) Before making a determination under subsection (2) for a functional body, the Mayor shall consult that body.

(5) The Secretary of State may by regulations make provision about the performance of the duty under subsection (1) or (2).

(6) Regulations under subsection (5) may, in particular—

(a) make provision about—

(i) when a determination under subsection (1) or (2) is to be made,

(ii) how such a determination is to be made, and

(iii) the period for which such a determination is to be made;

(b) make provision about the monitoring of an amount determined under subsection (1) or (2);

(c) make provision about factors to which regard may be had in making a determination under subsection (1) or (2) or in monitoring an amount determined under that subsection.

(7) Regulations under subsection (5) may include provision requiring a person making a determination under subsection (1) or (2) to have regard to one or more specified codes of practice, whether issued by the Secretary of State or another.

(8) A local authority’s function under subsection (1) shall be discharged only by the authority.

(9) Section 38(1) of the Greater London Authority Act 1999 (c. 29) (delegation by Mayor) does not apply in relation to functions under subsection (2).

(10) The power under subsection (7) is not to be read as limited to the specification of an existing document.

(11) In this section—

“functional body” has the same meaning as in the Greater London Authority Act 1999 (c. 29);

“local authority” does not include the Greater London Authority or a functional body;

“Mayor” means Mayor of London.

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.

Temporary borrowing

5

(1) Subject to subsection (2), any limit for the time being determined by or for a local authority under section 3, or applicable to it under section 4 or 12A, shall be treated for the purposes of this Chapter as increased by the amount of any payment which—

(a) is due to the authority in the period to which the limit relates, but

(b) has not yet been received by it.

(2) In the case of a limit determined under section 3, or set under section 4(2) or 12A, subsection (1) shall not apply to any payment whose delayed receipt was taken into account in arriving at the limit.

Protection of lenders

6

A person lending money to a local authority shall not be bound to enquire whether the authority has power to borrow the money and shall not be prejudiced by the absence of any such power.

Credit arrangements

“Credit arrangements”

7

(1) For the purposes of this Chapter, a local authority shall be taken to have entered into a credit arrangement where—

(a) it enters into a transaction which gives rise to a liability on its part, and

(b) the liability is a qualifying liability.

(2) A transaction entered into by a local authority is to be taken for the purposes of subsection (1) as giving rise to a liability on the part of the authority if—

(a) it falls in accordance with proper practices to be treated for the purposes of the authority’s accounts as giving rise to such a liability, or

(b) it falls in accordance with regulations made by the Secretary of State to be treated as falling within paragraph (a).

(3) The reference in subsection (1)(b) to a qualifying liability is to any liability other than—

(a) a liability to repay money,

(b) a liability in respect of which the date for performance is less than 12 months after the date on which the transaction giving rise to the liability is entered into, and

(c) a liability of a description specified for the purposes of this provision by regulations made by the Secretary of State.

Control of credit arrangements

8

(1) A local authority may not enter into, or vary, a credit arrangement if doing so would result in a breach of—

(a) the limit for the time being determined by or for it under section 3, or

(b) any limit for the time being applicable to it under section 4 , or

(2) In applying those limits for the purposes of subsection (1)—

(a) entry into a credit arrangement shall be treated as the borrowing of an amount of money equal to the cost of the arrangement, and

(b) variation of a credit arrangement shall be treated as the borrowing of an amount of money equal to the cost of the variation.

(3) The Secretary of State may by regulations make provision about the calculation for the purposes of subsection (2) of the cost of a credit arrangement or a variation and may, in particular, make provision about the treatment of options.

Capital receipts

“Capital receipt”

9

(1) Subject to subsection (3), references in this Chapter to a capital receipt, in relation to a local authority, are to a sum received by the authority in respect of the disposal by it of an interest in a capital asset.

(2) An asset is a capital asset for the purposes of subsection (1) if, at the time of the disposal, expenditure on the acquisition of the asset would be capital expenditure.

(3) The Secretary of State may by regulations—

(a) make provision for the whole of a sum received by a local authority in respect of the disposal by it of an interest in a capital asset, or such part of such a sum as may be determined under the regulations, to be treated as not being a capital receipt for the purposes of this Chapter;

(b) make provision for the whole of a sum received by a local authority otherwise than in respect of the disposal by it of an interest in a capital asset, or such part of such a sum as may be determined under the regulations, to be treated as being a capital receipt for the purposes of this Chapter.

(4) Where a sum becomes payable to a local authority before it is actually received by the authority, it shall be treated for the purposes of this section as received by the authority when it becomes payable to it.

Non-money receipts

10

(1) The Secretary of State may by regulations apply section 9 to cases where—

(a) a local authority makes a disposal of the kind mentioned in subsection (1) of that section and the consideration for the disposal does not consist wholly of money payable to the authority, or

(b) a local authority receives otherwise than in the form of money anything which, if received in that form, would be a capital receipt under that section.

(2) Regulations under subsection (1) may, in particular—

(a) make provision for a local authority to be treated as receiving a sum of such an amount as may be determined under the regulations;

(b) make provision about when the deemed receipt is to be treated as taking place.

Use of capital receipts

11

(1) The Secretary of State may by regulations make provision about the use of capital receipts by a local authority.

(2) Regulations under subsection (1) may, in particular—

(a) make provision requiring an amount equal to the whole or any part of a capital receipt to be used only to meet—

(i) capital expenditure, or

(ii) debts or other liabilities;

(b) make provision requiring an amount equal to the whole or any part of a capital receipt to be paid to the Secretary of State.

(3) The power under subsection (1), so far as relating to provision of the kind mentioned in subsection (2)(b), shall only apply to receipts which a local authority derives from the disposal of an interest in housing land.

(4) The reference in subsection (3) to housing land is to any land, house or other building in relation to which the local authority is, or has been, subject to the duty under section 74 of the Local Government and Housing Act 1989 (c. 42) (duty to keep Housing Revenue Account).

(5) Regulations under subsection (1) may include provision authorising the Secretary of State to set off any amount which an authority in Wales is liable to pay to him under this section against any amount which he is liable to pay to it.

(5A) Where the Secretary of State is liable to repay an amount that has been overpaid by a local housing authority in England under this section, the Secretary of State may set off against the amount of the repayment any amount that the authority is liable to pay the Secretary of State under—

(a) this section, or

(b) section 69 of the Housing and Planning Act 2016 (payments in respect of vacant higher value housing).

(6) The Secretary of State and a local authority in England may enter into an agreement with the effect that a requirement imposed under subsection (2)(b) does not apply to, or is modified in its application to, capital receipts of the authority that are specified or described in the agreement.

Investment

Power to invest

12

A local authority may invest—

(a) for any purpose relevant to its functions under any enactment, or

(b) for the purposes of the prudent management of its financial affairs.

Miscellaneous

Security for money borrowed etc

13

(1) Except as provided by subsection (3), a local authority may not mortgage or charge any of its property as security for money which it has borrowed or which it otherwise owes.

(2) Security given in breach of subsection (1) shall be unenforceable.

(3) All money borrowed by a local authority (whether before or after the coming into force of this section), together with any interest on the money borrowed, shall be charged indifferently on all the revenues of the authority.

(4) All securities created by a local authority shall rank equally without any priority.

(5) The High Court may appoint a receiver on application by a person entitled to principal or interest due in respect of any borrowing by a local authority if the amount due remains unpaid for a period of two months after demand in writing.

(6) The High Court may appoint a receiver under subsection (5) on such terms, and confer on him such powers, as it thinks fit.

(7) The High Court may confer on a receiver appointed under subsection (5) any powers which the local authority has in relation to—

(a) collecting, receiving or recovering the revenues of the local authority,

(b) issuing levies or precepts, or

(8) No application under subsection (5) may be made unless the sum due in respect of the borrowing concerned amounts to not less than £10,000.

(9) The Secretary of State may by order substitute a different sum for the one for the time being specified in subsection (8).

Information

14

A local authority shall supply the Secretary of State with such information relating to any of the matters dealt with in this Chapter, and at such time, as he may request.

Supplementary

Guidance

15

(1) In carrying out its functions under this Chapter, a local authority shall have regard—

(a) to such guidance as the Secretary of State may issue, and

(b) to such other guidance as the Secretary of State may by regulations specify for the purposes of this provision.

(2) The power under subsection (1)(b) is not to be read as limited to the specification of existing guidance.

“Capital expenditure”

16

(1) Subject to subsection (2), references in this Chapter to capital expenditure, in relation to a local authority, are to expenditure of the authority which falls to be capitalised in accordance with proper practices.

(2) The Secretary of State may—

(a) by regulations provide that expenditure of local authorities shall be treated for the purposes of this Chapter as being, or as not being, capital expenditure;

(b) by direction provide that expenditure of a particular local authority shall be treated for the purposes of this Chapter as being, or as not being, capital expenditure.

External funds

17

(1) For the purposes of this Chapter—

(a) borrowing of money by a local authority for the purposes of an external fund shall be treated as not being borrowing by the authority;

(b) the temporary use by a local authority of money forming part of an external fund, if not for a purpose of the fund, shall be treated as borrowing by the authority;

(c) entry into a credit arrangement by a local authority for the purposes of an external fund shall be treated as not being entry into a credit arrangement by the authority;

(d) a disposal by a local authority of—

(i) an interest in an asset which, at the time of the disposal, is an asset of an external fund, or

(ii) an investment held for the purposes of such a fund,

shall be treated as not being a disposal by the authority;

(e) the making of an investment by a local authority for the purposes of an external fund shall be treated as not being the making of an investment by the authority;

(f) expenditure incurred by a local authority in respect of payments out of an external fund shall be treated as not being expenditure of the authority.

(2) In this section, references to an external fund, in relation to a local authority, are to—

(a) a superannuation fund which the authority is required to keep by virtue of the Superannuation Act 1972 (c. 11), or

(b) a trust fund of which the authority is a trustee.

Local authority companies etc

18

(1) The Secretary of State may, for the purposes of this Chapter, by regulations make provision for things done by or to a body mentioned in subsection (2) to be treated, in such cases and to such extent as the regulations may provide, as done by or to a local authority specified in, or determined in accordance with, the regulations.

(2) Those bodies are—

(a) a Passenger Transport Executive,

(b) a company which, in accordance with Part 5 of the Local Government and Housing Act 1989 (c. 42) (companies in which local authorities have interests), is under the control, or for the time being subject to the influence, of a local authority or a Passenger Transport Executive, and

(c) a trust to which the provisions of section 69 of that Act (companies subject to local authority influence) are applicable because of an order under section 72 of that Act (trusts influenced by local authorities).

(3) A local authority to which regulations under this section apply and any body or bodies falling within subsection (2)(a) or (b) with which the regulations link the authority are referred to in this section as the members of a local authority group.

(4) Regulations under this section may include—

(a) provision for the application of any of the provisions of this Chapter to members of a local authority group subject to such modifications as the regulations may specify;

(b) provision as to the way in which—

(i) dealings between members of a local authority group, or

(ii) changes in the capitalisation or capital structure of a company in a local authority group,

are to be brought into account for the purposes of this Chapter.

Application to parish and community councils

19

(1) In sections 2(3) and (4), 6, 9 to 12, 13, 15, 16, 17(1)(a), (b) and (d) to (f) and (2) and 18, references to a local authority include a parish council, a community council and charter trustees.

(2) Schedule 1 (which makes provision about capital finance in relation to parish and community councils and charter trustees) has effect.

(3) The appropriate person may by regulations—

(a) apply any of the other provisions of this Chapter to parish or community councils or charter trustees, or parish or community councils or charter trustees of any description, with or without modifications, and

(b) make any corresponding disapplication of any of the provisions of Schedule 1.

Directions

20

(1) Directions under this Chapter shall be in writing.

(2) Directions under this Chapter may be expressed to have effect in specified circumstances or subject to specified conditions.

(3) Any power to give a direction under this Chapter includes power to give a direction varying or revoking a previous direction given in exercise of the power.

Chapter 2 — Accounts

Accounting practices

21

(1) The Secretary of State may by regulations make provision about the accounting practices to be followed by a local authority, in particular with respect to the charging of expenditure to a revenue account.

(1A) The Secretary of State may issue guidance about the accounting practices to be followed by a local authority, in particular with respect to the charging of expenditure to a revenue account.

(1B) A local authority must have regard to any guidance issued to it under subsection (1A).

(2) In any enactment to which this subsection applies, reference to proper practices, in relation to accounts of a local authority, is to those accounting practices—

(a) which the authority is required to follow by virtue of any enactment, or

(b) which are contained in a code of practice or other document which is identified for the purposes of this provision by regulations made by the Secretary of State.

(3) In the event of conflict between practices falling within paragraph (a) of subsection (2) and practices falling within paragraph (b) of that subsection, only those falling within paragraph (a) are to be regarded as proper practices.

(4) Subsections (2) and (3) apply to any enactment contained in—

(a) this Act,

(b) any Act passed after or in the same Session as this Act,

(ca) the Local Government Finance Act 1992 (c. 14),

(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(da) the Greater London Authority Act 1999 (c. 29), and

(e) subordinate legislation (within the meaning of the Interpretation Act 1978 (c. 30)) whenever made.

(5) The power under subsection (2)(b) is not to be read as limited to the identification of an existing document.

(6) In this section, “local authority” includes—

(a) a parish council,

(b) a parish meeting of a parish which does not have a separate parish council,

(d) a Passenger Transport Executive,

(e) the London Waste and Recycling Board,

(f) charter trustees (within the meaning of the Local Audit and Accountability Act 2014),

(g) a port health authority for a port health district that is wholly in England,

(h) a conservation board established by order of the Secretary of State under section 86 of the Countryside and Rights of Way Act 2000,

(i) a chief constable for a police force for a police area in England,

(j) the Commissioner of Police of the Metropolis,

(k) an internal drainage board for an internal drainage district—

(i) wholly in England, or

(ii) partly in England and partly in Wales, and

(l) any other person or body which for the time being is a relevant authority for the purposes of the Local Audit and Accountability Act 2014 and—

(i) is not listed in paragraphs (a) to (k) or section 23(1),

(ii) is not a health service body (within the meaning of that Act),

(iii) is not specified in regulations under section 23(2), and

(iv) does not fall within a class of bodies so specified.

“Capital expenditure”

22

(1) References to a revenue account, in relation to a local authority, are to one of the following accounts for a financial year of the authority—

(a) a revenue account which the authority is required to keep by virtue of any enactment;

(b) a revenue account which the authority is required to keep in order to comply with proper practices;

(2) This section has effect for the purposes of—

(a) the Local Government and Housing Act 1989 (c. 42),

(b) any enactment passed after or in the same Session as that Act, and

(3) In this section, “local authority” includes—

(a) a parish council,

(b) a parish meeting of a parish which does not have a separate parish council,

(d) a Passenger Transport Executive,

(e) the London Waste and Recycling Board,

(f) charter trustees (within the meaning of the Local Audit and Accountability Act 2014),

(g) a port health authority for a port health district that is wholly in England,

(h) a conservation board established by order of the Secretary of State under section 86 of the Countryside and Rights of Way Act 2000,

(i) a chief constable for a police force for a police area in England,

(j) the Commissioner of Police of the Metropolis,

(k) an internal drainage board for an internal drainage district—

(i) wholly in England, or

(ii) partly in England and partly in Wales, and

(l) any other person or body which for the time being is a relevant authority for the purposes of the Local Audit and Accountability Act 2014 and—

(i) is not listed in paragraphs (a) to (k) or section 23(1),

(ii) is not a health service body (within the meaning of that Act),

(iii) is not specified in regulations under section 23(2), and

(iv) does not fall within a class of bodies so specified.

Chapter 3 — General

“Local authority”

23

(1) The following are local authorities for the purposes of this Part—

(a) a county council;

(b) a county borough council;

(d) the Greater London Authority;

(e) a functional body, within the meaning of the Greater London Authority Act 1999 (c. 29);

(f) a London borough council;

(g) the Common Council of the City of London, in its capacity as a local authority, police authority or port health authority;

(h) the Council of the Isles of Scilly;

(i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(j) an authority established under section 10 of the Local Government Act 1985 (c. 51) (waste disposal authorities);

(k) a joint authority established by Part 4 of that Act (fire and rescue services and transport);

(ka) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(l) a joint planning board constituted for an area in Wales outside a National Park by an order under section 2(1B) of the Town and Country Planning Act 1990 (c. 8);

(m) a fire and rescue authority constituted by a scheme under section 2 of the Fire and Rescue Services Act 2004 or a scheme to which section 4 of that Act applies;

(ma) a fire and rescue authority created by an order under section 4A of that Act;

(n) a police and crime commissioner;

(o) any other body specified for the purposes of this subsection by regulations under subsection (2).

(2) The Secretary of State may by regulations specify for the purposes of subsection (1) any body which is (or any class of bodies each of which is)—

(a) a levying body, within the meaning of section 74 of the Local Government Finance Act 1988 (c. 41),

(b) a body to which section 75 of that Act applies (bodies with power to issue special levies),

(d) a local precepting authority as defined in section 69 of the Local Government Finance Act 1992 (c. 14).

(3) Regulations under subsection (2) may provide for this Part to have effect, in relation to a body specified under that subsection, subject to exceptions or modifications.

(4) This Part, other than sections 1 to 8, 12A to 12D, 13 and 17 (borrowing etc), applies in relation to an economic prosperity board established under section 88 of the Local Democracy, Economic Development and Construction Act 2009 as it applies in relation to a local authority.

(5) This Part applies in relation to a combined authority established under section 103 of that Act as it applies in relation to a local authority, except that section 1 confers power on such a combined authority to borrow money for a purpose relevant to its transport functions only or in relation to any other functions of the authority that are specified for the purposes of this subsection in regulations made by the Secretary of State.

(6) A function of a combined authority may be specified in regulations under subsection (5) only with the consent of—

(a) each county council the whole or any part of whose area is within the area of the authority,

(b) each district council whose area is within the area of the authority, and

(7) Subsection (6) is subject to section 106A of the Local Democracy, Economic Development and Construction Act 2009 (which enables regulations to be made without the consent of every authority within paragraphs (a) and (b) of that subsection in certain circumstances).

(8) The reference in subsection (5) to functions of the authority includes, in the case of a mayoral combined authority, mayoral functions.

(8A) This Part applies in relation to a combined county authority (a “CCA”) established under section 9(1) of the Levelling-up and Regeneration Act 2023 as it applies in relation to a local authority, except that section 1 confers power on a CCA to borrow money in relation only to functions of the CCA that are specified for the purposes of this subsection in regulations made by the Secretary of State.

(8B) A function of a CCA may be specified in regulations under subsection (8A) only with the consent of—

(a) each county council for an area within the CCA’s area or proposed area,

(b) each unitary district council for an area within the CCA’s area or proposed area, and

In this subsection “unitary district council” means a district council whose area does not form part of the area of a county council.

(8C) The reference in subsection (8A) to functions of the authority includes, in the case of a mayoral CCA, mayoral functions.

(8D) In subsection (8C)—

“mayoral CCA” has the meaning given by section 27(8) of the Levelling-up and Regeneration Act 2023;

“mayoral functions” has the meaning given by section 41(8) of that Act.

(9) In subsection (8)—

“mayoral combined authority” has the meaning given by section 107A(8) of the Local Democracy, Economic Development and Construction Act 2009;

“mayoral functions” has the meaning given by section 107G(7) of that Act.

(10) No regulations under subsection (5) or (8A) may be made unless a draft of the statutory instrument containing the regulations (whether containing them alone or with other provisions) has been laid before, and approved by a resolution of, each House of Parliament.

(10A) If a draft of a statutory instrument containing regulations under subsection (5) or (8A) would, apart from this subsection, be treated for the purposes of the standing orders of either House of Parliament as a hybrid instrument, it is to proceed in that House as if it were not such an instrument.

(11) This Part applies in relation to a corporate joint committee established by regulations made under Part 5 of the Local Government and Elections (Wales) Act 2021 as it applies in relation to a local authority.

Wales

24

In its application to Wales, this Part, except section 19 and Schedule 1, has effect as if for any reference to the Secretary of State there were substituted a reference to the Welsh Ministers.

(1A) Subsection (1) does not apply to section 21 to the extent that it confers functions on the Secretary of State in relation to a person or body that—

(a) is a relevant authority for the purposes of the Local Audit and Accountability Act 2014, and

(b) exercises functions in relation to an area that is partly in England and partly in Wales.

Part 2 — Financial administration

Budget calculations: report on robustness of estimates etc

25

(1) Where an authority to which section 31A, 32, 42A or 43 of the Local Government Finance Act 1992 (billing or major precepting authority) or section 85 of the Greater London Authority Act 1999 (c. 29) (Greater London Authority) applies is making calculations in accordance with that section, the chief finance officer of the authority must report to it on the following matters—

(a) the robustness of the estimates made for the purposes of the calculations, and

(b) the adequacy of the proposed financial reserves.

(2) An authority to which a report under this section is made shall have regard to the report when making decisions about the calculations in connection with which it is made.

(3) In this section, “chief finance officer”, in relation to an authority, means the officer having responsibility for the administration of the authority’s financial affairs for the purposes of—

(a) section 151 of the Local Government Act 1972 (c. 70),

(b) section 73 of the Local Government Act 1985 (c. 51),

(d) section 6 of the Local Government and Housing Act 1989 (c. 42), ...

(e) section 127(2) of the Greater London Authority Act 1999, or

(f) Schedule 1, 2 or 4 to the Police Reform and Social Responsibility Act 2011

Minimum reserves

26

(1) This section has effect in relation to the estimation of financial reserves for the purpose of calculations in accordance with—

(a) section 31A or 32 of the Local Government Finance Act 1992 (calculation by billing authority of council tax or budget requirement for financial year),

(b) section 42A or 43 of that Act (corresponding provision for major precepting authority), or

(c) section 85 of the Greater London Authority Act 1999 (calculation by Greater London Authority of component and consolidated budget requirements for financial year).

(2) In the case of a controlled reserve, it shall not be regarded as appropriate for the balance of the reserve at the end of the financial year under consideration to be less than the minimum amount determined in accordance with regulations made by the appropriate person.

(3) In subsection (2), “controlled reserve” means a financial reserve of a description specified for the purposes of this section by regulations made by the appropriate person.

(4) Different provision may be made under subsection (2) for different descriptions of financial reserve.

Budget calculations: report on inadequacy of controlled reserve

27

(1) This section applies where an authority to which section 31A, 32, 42A or 43 of the Local Government Finance Act 1992 (c. 14) or section 85 of the Greater London Authority Act 1999 (c. 29) applies is making calculations in accordance with that section.

(2) If in relation to the previous financial year it appears to the chief finance officer that a controlled reserve is or is likely to be inadequate, he must report to the authority on—

(a) the reasons for that situation, and

(b) the action, if any, which he considers it would be appropriate to take to prevent such a situation arising in relation to the corresponding reserve for the financial year under consideration.

(3) For the purposes of subsection (2)—

(a) a controlled reserve is a financial reserve of a description specified by regulations under section 26(3), and

(b) such a reserve is inadequate if the balance of the reserve at the end of the financial year concerned is less than the minimum amount determined in accordance with regulations under section 26(2).

(4) An authority to which a report under this section is made shall have regard to the report when making decisions about the calculations in connection with which it is made.

(5) In this section, “chief finance officer” has the same meaning as in section 25.

Budget monitoring: general

28

(1) Where in relation to a financial year an authority to which section 31A, 32, 42A or 43 of the Local Government Finance Act 1992 (billing or major precepting authority) applies has made the calculations required by that section, it must review them from time to time during the year.

(2) In carrying out a review under subsection (1), an authority must use the same figures for financial reserves as those used in the calculations under review, except in the case of financial reserves to meet a revenue account deficit from an earlier financial year.

(3) If as a result of carrying out a review under subsection (1) it appears to the authority that carried out the review that there has been a deterioration in its financial position, it must take such action, if any, as it considers necessary to deal with the situation.

(4) For the purposes of subsection (3), there is a deterioration in an authority’s financial position if on the review an amount falls to be calculated under section 31A(4), 32(4), 42A(4) or 43(4) of the Local Government Finance Act 1992 (c. 14) (council tax or budget requirement) and—

(a) none fell to be calculated under that provision at the time of the calculations under review, or

(b) an amount did then fall to be calculated under that provision and the amount then calculated is less than the amount calculated on the review.

(5) Where substitute calculations have effect, it is those calculations to which the duty under subsection (1) applies.

Budget monitoring: Greater London Authority

29

(1) Where in relation to a financial year the Greater London Authority has made the calculations required by section 85(3) to (7) of the Greater London Authority Act 1999 (c. 29) (calculation of component budget requirement for each constituent body), each of the bodies in respect of which the calculations have been made must from time to time during the year review the calculations relating to it.

(2) In carrying out a review under subsection (1), a body must use the same figures for financial reserves as those used in the calculations under review, except in the case of financial reserves to meet a revenue account deficit from an earlier financial year.

(3) If as a result of carrying out a review under subsection (1) it appears to the body that carried out the review that there has been a deterioration in its financial position, it must—

(a) take such action, if any, as it considers necessary to deal with the situation, and

(b) if it is a functional body, report the deterioration to—

(i) the Mayor of London, and

(ii) the Chair of the London Assembly.

(4) A report under subsection (3)(b) shall—

(a) include a statement of the reasons for the deterioration, and

(b) set out what action, if any, the body making the report proposes to take to deal with the situation.

(5) For the purposes of subsection (3), there is a deterioration in a body’s financial position if on the review an amount falls to be calculated under section 85(6) of the Greater London Authority Act 1999 (component budget requirement) and—

(a) none fell to be calculated under that provision at the time of the calculations under review, or

(b) an amount did then fall to be calculated under that provision and the amount then calculated is less than the amount calculated on the review.

(6) Where substitute calculations have effect, it is those calculations to which the duty under subsection (1) applies.

(7) In this section, “functional body” has the same meaning as in the Greater London Authority Act 1999.

Authorisation of agreements during the prohibition period

30

(1) In section 115 of the Local Government Finance Act 1988 (c. 41) (which sets out the consequences for a relevant authority of the receipt of a report made by its chief finance officer under section 114(3)), in subsection (6) (which prevents an authority that has received such a report from entering into certain agreements during the prohibition period), at the end there is inserted “ unless the chief finance officer of the authority authorises it to do so ”.

(2) After that subsection there is inserted—

(6A) The chief finance officer may only give authority for the purposes of subsection (6) above if he considers that the agreement concerned is likely to— (a) prevent the situation that led him to make the report from getting worse, (b) improve the situation, or (c) prevent the situation from recurring. (6B) Authority for the purposes of subsection (6) above shall— (a) be in writing, (b) identify the ground on which it is given, and (c) explain the chief finance officer’s reasons for thinking that the ground applies.

(3) In subsection (14) of that section (which defines certain terms used in that section), after the definition of “the Assembly”, there is inserted—

“chief finance officer” has the same meaning as in section 114;

Part 3 — Grants etc

Chapter 1 — Expenditure grant

Power to pay grant

31

(1) A Minister of the Crown may pay a grant to a local authority in England towards expenditure incurred or to be incurred by it.

(2) A Minister of the Crown, or the National Assembly for Wales, may pay a grant to a local authority in Wales towards expenditure incurred or to be incurred by it.

(3) The amount of a grant under this section and the manner of its payment are to be such as the person paying it may determine.

(4) A grant under this section may be paid on such conditions as the person paying it may determine.

(5) Conditions under subsection (4) may, in particular, include—

(a) provision as to the use of the grant;

(b) provision as to circumstances in which the whole or part of the grant must be repaid.

(6) In the case of a grant to a local authority in England, the powers under this section are exercisable with the consent of the Treasury.

Application to Greater London Authority

32

(1) For the purposes of section 31, expenditure of a functional body shall be treated as expenditure of the Greater London Authority.

(2) The conditions on which grant under section 31 may be paid include, in the case of a grant to the Greater London Authority, a condition requiring the Mayor to transfer the grant to a functional body.

(3) A decision to pay a grant under section 31 subject to such a condition as is mentioned in subsection (2) above shall be notified to the functional body concerned as well as to the Greater London Authority.

(4) Where a grant paid under section 31 to the Greater London Authority is paid subject to such a condition as is mentioned in subsection (2) above, the Mayor must transfer the grant to the functional body concerned forthwith.

(5) Where a grant paid under section 31 to the Greater London Authority is not paid subject to such a condition as is mentioned in subsection (2) above, the Mayor may transfer the grant to a functional body.

(6) Where grant under section 31 is transferred under this section to a functional body, any conditions to which the grant is subject shall apply to the transferee instead of the transferor.

(7) In this section, “Mayor” means Mayor of London.

Interpretation of Chapter 1

33

(1) The following are local authorities for the purposes of this Chapter—

(a) a county council;

(b) a county borough council;

(d) the Greater London Authority;

(e) a London borough council;

(f) the Common Council of the City of London, in its capacity as a local authority, police authority or port health authority;

(g) the Council of the Isles of Scilly;

(h) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(i) an authority established under section 10 of the Local Government Act 1985 (c. 51) (waste disposal authorities);

(j) a joint authority established by Part 4 of that Act (fire and rescue services and transport);

(ja) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(jb) an economic prosperity board established under section 88 of the Local Democracy, Economic Development and Construction Act 2009;

(jc) a combined authority established under section 103 of that Act;

(jd) a combined county authority established under section 9(1) of the Levelling-up and Regeneration Act 2023;

(je) a corporate joint committee established by regulations made under Part 5 of the Local Government and Elections (Wales) Act 2021;

(k) a joint planning board constituted for an area in Wales outside a National Park by an order under section 2(1B) of the Town and Country Planning Act 1990 (c. 8);

(l) a fire and rescue authority constituted by a scheme under section 2 of the Fire and Rescue Services Act 2004 or a scheme to which section 4 of that Act applies;

(la) a fire and rescue authority created by an order under section 4A of that Act;

(m) a police and crime commissioner.

(2) In this Chapter—

“functional body” has the same meaning as in the Greater London Authority Act 1999 (c. 29);

“Minister of the Crown” has the same meaning as in the Ministers of the Crown Act 1975 (c. 26).

Chapter 2 — Other grants etc

Best value grant: parishes

34

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Best value grant: communities

35

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Grants in connection with designation for service excellence

36

(1) The appropriate person may pay any of the following to a best value authority which, in relation to any of its functions, is subject to the duty in section 3(1) of the Local Government Act 1999 (best value duty) or to a relevant Welsh authority—

(a) a grant towards expenditure incurred by the authority in applying for the award of a designation based on excellence in the provision of services, and

(b) where the authority is awarded such a designation—

(i) a grant as a reward for being awarded such a designation, and

(ii) a grant towards expenditure incurred or to be incurred by the authority in disseminating information about best practices.

(2) The amount of a grant under this section and the manner of its payment are to be such as the appropriate person may determine.

(3) A grant under this section may be paid on such conditions as the appropriate person may determine as to the circumstances in which the whole or any part of the grant must be repaid.

(4) In subsection (1) “relevant Welsh authority” means—

(a) a county council or county borough council in Wales;

(b) a National Park authority for a National Park in Wales;

(c) a fire and rescue authority in Wales, constituted by a scheme under section 2 of the Fire and Rescue Services Act 2004 or a scheme to which section 4 of that Act applies.

Emergency financial assistance to combined fire authorities

37

In section 155 of the Local Government and Housing Act 1989 (c. 42) (emergency financial assistance to local authorities), in subsection (4) (authorities that are local authorities for the purposes of that section), after paragraph (g) there is inserted

; or (h) a fire authority in England and Wales constituted by a combination scheme under the Fire Services Act 1947.

Loans by Public Works Loan Commissioners

38

(1) The Secretary of State may, if he thinks it appropriate, make payments to the Treasury, in respect of local loans made under section 3 of the National Loans Act 1968, so as to reduce or extinguish such debt (whether then due or not) of a local authority in England to the Treasury as he thinks fit.

(2) The National Assembly for Wales may, if it thinks it appropriate, make payments to the Treasury, in respect of local loans made under section 3 of the National Loans Act 1968, so as to reduce or extinguish such debt (whether then due or not) of a local authority in Wales to the Treasury as the Assembly thinks fit.

(3) The amount—

(a) required to extinguish a debt, or

(b) by which a payment reduces a debt,

shall be such as may be determined by the Treasury.

(4) The Treasury may refuse to accept a payment which the Secretary of State or the National Assembly for Wales proposes to make to them under this section.

(5) In this section “local authority” means—

(a) in relation to England—

(i) a district council,

(ii) a county council that is the council for a county in which there are no district councils,

(iii) a London borough council,

(iv) the Common Council of the City of London, or

(v) the Council of the Isles of Scilly; and

(b) in relation to Wales, a county council or a county borough council.

Payments towards local authority indebtedness

39

(1) The Secretary of State may, if he thinks it appropriate, make payments to a local authority in England for application by the authority in reducing or extinguishing such debt (whether then due or not) of the authority as he thinks fit.

(2) The National Assembly for Wales may, if it thinks it appropriate, make payments to a local authority in Wales for application by the authority in reducing or extinguishing such debt (whether then due or not) of the authority as the Assembly thinks fit.

(3) The person making payments to a local authority under this section may specify how the payments are to be applied by the authority and may in particular specify—

(a) the debt or debts to be extinguished, or

(b) the debt or debts to be reduced.

(4) A payment under this section may be made subject to conditions imposed by the person making the payment.

(5) The conditions that may be imposed under subsection (4) include (in particular) conditions relating to the repayment in specified circumstances of all or part of the payment.

(6) Payments made to a local authority under this section may not be applied in reducing or extinguishing any debt of the authority to the Treasury, in respect of local loans made under section 3 of the National Loans Act 1968.

(7) In this section “local authority” means—

(a) in relation to England—

(i) a district council,

(ii) a county council that is the council for a county in which there are no district councils,

(iii) a London borough council,

(iv) the Common Council of the City of London, or

(v) the Council of the Isles of Scilly; and

(b) in relation to Wales—

(i) a county council,

(ii) a county borough council, or

(iii) a corporate joint committee established by regulations under Part 5 of the Local Government and Elections (Wales) Act 2021.

Local government finance reports: Wales

40

(1) Schedule 2 (which makes provision for enabling the National Assembly for Wales to make two local government finance reports for a year, one dealing with police authorities and one dealing with other authorities and bodies) has effect.

(2) This section applies in relation to the financial year beginning on 1st April 2004 and subsequent financial years.

Part 4 — Business improvement districts

BID arrangements

Arrangements with respect to business improvement districts

41

(1) A billing authority may in accordance with this Part make arrangements (“BID arrangements”) with respect to an area (a “business improvement district”) comprising all or part of the area of the authority.

(2) The purpose of BID arrangements is to enable—

(a) the projects specified in the arrangements to be carried out for the benefit of the business improvement district or those who live, work or carry on any activity in the district, and

(b) those projects to be financed (in whole or in part) by a levy (“BID levy”) imposed on the non-domestic ratepayers, or a class of such ratepayers, in the district.

Joint arrangements

42

(1) The Secretary of State may by regulations make provision for or in connection with enabling two or more billing authorities to make BID arrangements with respect to a business improvement district comprising all or part of the area of each of the authorities.

(2) The provision which may be made by regulations under this section includes provision which modifies any provision made by or under this Part in its application to such arrangements.

Additional contributions and action

43

(1) The persons specified in subsection (2) may make financial contributions or take action for the purpose of enabling the projects specified in BID arrangements to be carried out.

(2) Those persons are—

(a) the billing authority which has made the arrangements,

(b) a county council or parish council any part of whose area falls within the business improvement district, and

Duty to comply with arrangements

44

Where BID arrangements are in force, the billing authority which made the arrangements must comply with them.

BID levy

45

(1) BID levy is to be imposed in a business improvement district only for periods (“chargeable periods”) falling within the period in which BID arrangements are in force in respect of the district.

(2) The length of any chargeable period, and the day on which it begins, are to be such as may be specified in the BID arrangements.

(3) The amount of BID levy for any chargeable period—

(a) is to be calculated in such manner as may be provided in the BID arrangements, and

(b) may be different for different cases.

Liability for BID levy

46

(1) BID arrangements must specify the description of non-domestic ratepayers in the business improvement district who are to be liable for BID levy for a chargeable period.

(2) A person is to be liable for BID levy for a chargeable period if he falls within that description at any time within the period.

(3) The amount of a person’s liability for BID levy for any chargeable period is to be determined in accordance with the BID arrangements.

(4) Any amount of BID levy for which a person is liable is to be paid to the billing authority which made the arrangements.

Administration etc

BID Revenue Account

47

(1) A billing authority which has made BID arrangements must, in accordance with proper practices, keep an account, to be called the BID Revenue Account.

(2) Amounts paid to the authority by way of BID levy must be credited to the BID Revenue Account.

(3) Amounts are to be debited to the BID Revenue Account only in accordance with BID arrangements.

(4) The Secretary of State may by regulations make further provision in relation to the BID Revenue Account.

Administration of BID levy etc

48

(1) The Secretary of State may by regulations make provision with respect to the imposition, administration, collection, recovery and application of BID levy.

(2) The provision which may be made by regulations under this section includes provision—

(a) corresponding to any provision which may be made by regulations under section 50 or 63 of, or Schedule 9 to, the Local Government Finance Act 1988 (c. 41) (joint owners or occupiers, death and administration of non-domestic rating);

(b) modifying or applying with modifications any provision made by regulations under any of those provisions.

(3) Nothing in subsection (2) is to be taken as limiting the power conferred by subsection (1).

Procedure

BID proposals

49

(1) BID arrangements are not to come into force unless proposals for the arrangements (“BID proposals”) are approved by a ballot of the non-domestic ratepayers in the proposed business improvement district who are to be liable for the proposed BID levy.

(2) The Secretary of State may by regulations make provision—

(a) as to the persons who may draw up BID proposals,

(b) as to the procedures to be followed in connection with the drawing up of BID proposals,

(d) as to the date which may be provided under BID proposals for the coming into force of BID arrangements which give effect to the proposals.

Approval in ballot

50

(1) BID proposals are not to be regarded as approved by a ballot held for the purposes of section 49(1) unless two conditions are satisfied.

(2) The first condition is that a majority of the persons voting in the ballot have voted in favour of the BID proposals.

(3) The second condition is that A exceeds B.

(4) A is the aggregate of the rateable values of each hereditament in respect of which a person voting in the ballot has voted in favour of the BID proposals.

(5) B is the aggregate of the rateable values of each hereditament in respect of which a person voting in the ballot has voted against the BID proposals.

(6) For the purposes of subsections (4) and (5), the rateable value of a hereditament is —

(a) in a case where the day of the ballot is a day on which paragraph 3 of Schedule 4ZA to the Local Government Finance Act 1988 applies in relation to the hereditament, the rateable value shown for that day under section 42(4) of that Act as regards the hereditament minus G (within the meaning of that Schedule), or

(b) in any other case, the rateable value shown for that day under section 42(4) of that Act as regards the hereditament.

Power of veto

51

(1) This section applies where BID proposals are approved by a ballot held for the purposes of section 49(1).

(2) The billing authority to which the proposals relate may, in prescribed circumstances, veto the proposals within such period from the date of the ballot as may be prescribed.

(3) In deciding whether to exercise the veto, a billing authority is to have regard to such matters as may be prescribed.

(4) If a billing authority vetoes BID proposals, it must give notice of the exercise of the veto to the persons entitled to vote in the ballot.

(5) The notice—

(a) must set out the reasons for the exercise of the veto, and

(b) must give details of the right of appeal under section 52.

(6) A copy of the notice must be sent to the Secretary of State.

Appeal against veto

52

(1) Where a billing authority vetoes BID proposals, any person who was entitled to vote in the ballot may appeal to the Secretary of State.

(2) The Secretary of State may by regulations make provision in relation to appeals under this section, including provision—

(a) as to the time by which an appeal is to be made,

(b) as to the manner in which an appeal is to be made,

(d) as to the matters to be taken into account in deciding whether to allow an appeal.

Commencement of BID arrangements

53

(1) This section applies where BID proposals are approved by a ballot held for the purposes of section 49(1).

(2) The billing authority concerned must ensure that BID arrangements which give effect to the proposals are made by the time the arrangements are to come into force in accordance with this section.

(3) Subject to subsection (4), the BID arrangements are to come into force on such day as may be provided under the BID proposals.

(4) If the BID proposals are vetoed under section 51, BID arrangements which give effect to the proposals are not to come into force unless the Secretary of State allows an appeal against the veto under section 52.

(5) Where the Secretary of State allows such an appeal, BID arrangements which give effect to the proposals are to come into force on such day as the Secretary of State may determine.

(6) The day determined under subsection (5) must not be earlier than the day mentioned in subsection (3).

(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Miscellaneous

Duration of BID arrangements etc

54

(1) BID arrangements are to have effect for such period (not exceeding 5 years) as may be specified in the arrangements.

(2) BID arrangements may be renewed for one or more periods each of which must not exceed 5 years, but only if the renewal of the arrangements on that or each occasion is approved by a ballot of the non-domestic ratepayers in the business improvement district who are liable for the BID levy.

(3) The renewal of BID arrangements is not to be regarded as approved by a ballot held for the purposes of subsection (2) unless the two conditions in section 50 which apply to the approval of BID proposals are satisfied in relation to the renewal of the arrangements.

(4) The Secretary of State may by regulations make provision—

(a) as to the alteration of BID arrangements, and

(b) as to the termination of BID arrangements.

(5) The provision which may be made by virtue of subsection (4)(a) or (b) includes provision preventing or restricting the alteration or early termination of BID arrangements.

(6) Nothing in subsection (5) is to be taken as limiting the power conferred by subsection (4).

(7) No regulations under subsection (4) shall be made by the Secretary of State unless a draft of the statutory instrument containing the regulations (whether containing them alone or with other provisions) has been laid before, and approved by a resolution of, each House of Parliament.

Regulations about ballots

55

(1) The Secretary of State may by regulations make provision in relation to ballots.

(2) The provision which may be made by regulations under this section includes provision—

(a) as to the timing of ballots;

(b) as to the non-domestic ratepayers entitled to vote in a ballot;

(d) as to the form that ballots may take;

(e) as to the persons who are to hold ballots;

(f) as to the conduct of ballots;

(g) conferring power on the Secretary of State to declare ballots void in cases of material irregularity;

(h) for or in connection with enabling a billing authority to recover the costs of a ballot from such persons and in such circumstances as may be prescribed.

(3) Nothing in subsection (2) is to be taken as limiting the power conferred by subsection (1).

(4) No regulations under subsection (1) which include provision of the kind mentioned in subsection (2)(b) shall be made by the Secretary of State unless a draft of the statutory instrument containing the regulations (whether containing them alone or with other provisions) has been laid before, and approved by a resolution of, each House of Parliament.

(5) In this section “ballot” means a ballot held for the purposes of section 49(1) or 54(2).

Power to make further provision

56

(1) The Secretary of State may by regulations make such supplementary, incidental, consequential or transitional provision as he considers necessary or expedient for the purposes of, in consequence of, or for giving full effect to, any provision made by or under this Part.

(2) The provision which may be made under subsection (1) includes provision amending any enactment (whenever passed or made).

(3) No regulations under subsection (1) which include provision amending an Act shall be made by the Secretary of State unless a draft of the statutory instrument containing the regulations (whether containing them alone or with other provisions) has been laid before, and approved by a resolution of, each House of Parliament.

Crown application

57

This Part binds the Crown.

Wales

58

(1) Sections 54(7), 55(4) and 56(3) do not apply in relation to Wales.

(2) In their application in relation to Wales—

(a) the remaining provisions of this Part have effect as if for each reference in those provisions to the Secretary of State there were substituted a reference to the National Assembly for Wales, and

(b) section 43(2)(b) has effect as if for the reference to a county council or parish council there were substituted a reference to a community council.

Interpretation of Part 4

59

(1) In this Part—

“BID arrangements” and “BID levy” have the meaning given by section 41;

“billing authority” means— in relation to England, a district council, a unitary county council, a London borough council, the Common Council of the City of London or the Council of the Isles of Scilly; and in relation to Wales, a county council or county borough council;

“business improvement district” has the meaning given by section 41;

“enactment” includes an enactment contained in a local or private Act or comprised in subordinate legislation (within the meaning of the Interpretation Act 1978 (c. 30));

“non-domestic ratepayer”, in relation to any area, means a person subject to a non-domestic rate under section 43 or 45 of the Local Government Finance Act 1988 (c. 41) (liability to non-domestic rates) because he is the owner or occupier of a hereditament situated in that area;

“prescribed” means prescribed by regulations made by the Secretary of State;

“unitary county council” means a county council that is the council for a county in which there are no district councils.

(2) Other expressions which are used in this Part and in Part 3 of the Local Government Finance Act 1988 (non-domestic rates) have the same meaning in this Part as they have in that Part.

Part 5 — Non-domestic rates

Submission of proposed rating lists

60

(1) In section 41(5) of the 1988 Act (proposed local non-domestic rating list to be sent to billing authority not later than 31 December preceding compilation date) for “31 December” there is substituted “ 30 September ”.

(2) In section 52(5) of that Act (proposed central non-domestic rating list to be sent to Secretary of State not later than 31 December preceding compilation date) for “31 December” there is substituted “ 30 September ”.

Small business relief

61

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Calculation of non-domestic rating multiplier

62

(1) Schedule 7 to the 1988 Act (non-domestic rating multipliers) is amended as follows.

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(11) After paragraph 9 (special authority’s non-domestic rating multiplier) there is inserted—

(9A) (1) A special authority’s small business non-domestic rating multiplier for a chargeable financial year shall be set by it in accordance with the formula— $A × B C$ (2) In sub-paragraph (1) above— (a) A is the special authority’s non-domestic rating multiplier for the year under paragraph 9 above, (b) B is the small business non-domestic rating multiplier for the year determined in accordance with Part 1 of this Schedule, and (c) C is the non-domestic rating multiplier for the year, so far as relating to England, determined in accordance with that Part. (3) The multiplier must be expressed as a figure in which a part of a whole (if any) is expressed to three decimal points only.

Rural settlement lists etc

63

(1) In section 42A of the 1988 Act (rural settlement list) in subsection (1) (duty of each billing authority to compile and maintain rural settlement list) after “billing authority” there is inserted “ in England ”.

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Relief for registered community amateur sports clubs

64

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) In section 67 of the 1988 Act (interpretation of Part 3 of that Act), after subsection (10) there is inserted—

(10A) The times at which a club is a registered club for the purposes of Schedule 18 to the Finance Act 2002 (community amateur sports clubs)— (a) shall, where it is registered with retrospective effect, be taken to have included those within the period beginning with the date with effect from which it is registered and ending with its registration; but (b) shall, where its registration is terminated with retrospective effect, be taken not to have included those within the period beginning with the date with effect from which its registration is terminated and ending with the termination of its registration.

Crown application

65

(1) After section 57 of the 1988 Act (special provision for 1990-1995) there is inserted—

(57A) (1) In relation to any relevant period the Secretary of State must make regulations under this section which apply in relation to England. (2) The regulations may contain such provisions as are mentioned in subsection (3) below in relation to any case where— (a) as regards a hereditament or hereditaments the chargeable amount for a chargeable day falls to be determined under section 43, 45 or 54 above, and (b) the day falls within a prescribed relevant financial year. (3) The provisions are that— (a) the chargeable amount shall be such as is found in accordance with prescribed rules, and (b) sections 43(4) to (6E) and 44 above, sections 45(4) to (6) and 46 above, or section 54(4) to (7) above (as the case may be) shall not apply. (4) A chargeable amount found in accordance with rules prescribed under this section, and any calculation (or component of a calculation) used to find that amount, may be the same as or different from what it would be apart from the regulations. (5) Rules prescribed under this section may be framed by reference to such factors as the Secretary of State thinks fit. (6) Without prejudice to section 143(1) below, regulations under this section relating to a relevant period may contain different provisions for different relevant financial years. (7) Without prejudice to section 143(1) below, regulations under this section may contain different provision in relation to locally listed hereditaments whose rateable value exceeds, and those whose rateable value does not exceed, a prescribed figure; and a locally listed hereditament is a hereditament for the time being shown in a local non-domestic rating list. (8) Without prejudice to section 143(1) and (2) below, regulations under this section may include provision— (a) imposing duties and conferring powers on valuation officers (whether as regards determinations, certificates or otherwise) in relation to the ascertainment of rateable values; (b) as to appeals relating to things done or not done by such officers. (9) Regulations under this section in their application to a particular relevant financial year shall not be effective unless they come into force before 1 January immediately preceding the year; but this is without prejudice to the power to amend or revoke. (10) In making regulations under this section the Secretary of State shall have regard to the object of securing (so far as practicable) that the aggregate amount payable to him and all billing authorities by way of non-domestic rates as regards a particular relevant period is, after disregarding any adjustments made to take account of amounts being payable at times other than those at which they would have been payable apart from the regulations, the same as the aggregate amount which would be so payable apart from the regulations. (11) For the purposes of subsection (10) above, the Secretary of State may rely on his estimate of the aggregate amounts and adjustments mentioned in that subsection. (12) Once the actual aggregate amounts and adjustments for a particular relevant period are ascertained, the Secretary of State may amend regulations under this section in their application to a financial year which begins after the coming into force of the amending regulations and falls within the same or a later relevant period to reflect the extent to which the actual aggregate amounts and adjustments differ from his estimate of those amounts and adjustments. (13) For the purposes of this section— (a) a relevant period is a period of five years beginning on 1 April 2005 or on any 1 April after that date on which lists must be compiled; (b) a relevant financial year, as regards regulations relating to a relevant period, is a financial year falling within the period.

(2) In section 58 of the 1988 Act (special provision for 1995 onwards) in subsection (1) (power to make regulations in relation to any relevant period) after “section” there is inserted “ which apply in relation to Wales ”.

Rating of meters

66

(1) In section 64 of the 1988 Act (hereditaments) after subsection (2) there is inserted—

(2A) In addition, a right is a hereditament if— (a) it is a right to use any land for the purpose of operating a meter to measure a supply of gas or electricity or such other service as— (i) the Secretary of State in relation to England, or (ii) the National Assembly for Wales in relation to Wales, may by order specify, and (b) the meter is owned by a person other than the consumer of the service.

(2) In subsection (4)(e) of that section (which contains a reference to any right which is a hereditament by virtue of subsection (2)) after “subsection (2)” there is inserted “ or (2A) ”.

(3) After subsection (11) of that section there is inserted—

(11A) The Secretary of State in relation to England, and the National Assembly in relation to Wales, may by regulations make provision as to what is to be regarded as being a meter for the purposes of subsection (2A) above. (11B) In subsection (2A) above “land” includes a wall or other part of a building.

Exemptions for agricultural buildings

67

(1) Schedule 5 to the 1988 Act (exemptions from non-domestic rating) is amended as follows.

(2) For paragraph 3(a) (which provides that a building is an agricultural building if it is occupied together with agricultural land and is used solely in connection with agricultural operations on the land) there is substituted—

(a) it is occupied together with agricultural land and is used solely in connection with agricultural operations on that or other agricultural land, or.

(3) After paragraph 7(1)(b) there is inserted

, and (c) the members who are occupiers of the land together have control of the body.

(4) For paragraph 7(3) there is substituted—

(3) This sub-paragraph applies if— (a) the building in question is occupied by a body corporate any of whose members are, or are together with the body, the occupiers of the building or buildings mentioned in sub-paragraph (2)(a) above, and (b) the members who are occupiers of the land together have control of the body.

(5) After paragraph 7(8) there is inserted—

(9) In this paragraph “control” shall be construed in accordance with section 416(2) to (6) of the Income and Corporation Taxes Act 1988.

Exemption for places of religious worship

68

In paragraph 11 of Schedule 5 to the 1988 Act (exemption for places of religious worship) for sub-paragraph (1)(a) there is substituted—

(a) a place of public religious worship;

Removal of power to prescribe rateable values

69

Paragraph 3 of Schedule 6 to the 1988 Act (power of Secretary of State by order to prescribe rateable values) ceases to have effect.

Local retention of rates

70

(1) In Schedule 8 to the 1988 Act (non-domestic rating: pooling), in paragraph 4 (rules for calculating authorities' non-domestic rating contributions), before sub-paragraph (5) there is inserted—

(4A) The rules may include provision for such deductions as the maker of the rules thinks fit for the purpose of enabling an authority to retain part, or all, of so much of the total payable to it in respect of the year under sections 43 and 45 above as exceeds an amount determined for the authority by or under the rules. (4B) Sub-paragraph (4A) above shall not apply in the case of a special authority. (4C) Sub-paragraph (2) above shall have effect subject to sub-paragraph (4A) above. (4D) The consent of the Treasury is required to the inclusion in regulations under this paragraph of provision under sub-paragraph (4A) above relating to England.

(2) In paragraph 5(6) of that Schedule (contribution to be calculated after end of year and certified by Audit Commission)—

(a) before the word “and” at the end of paragraph (b) there is inserted—

(ba) if it is an authority in England notify to the Secretary of State, and if it is an authority in Wales notify to the National Assembly for Wales, the amount of any deduction that in accordance with provision under paragraph 4(4A) above is made in calculating the amount mentioned in paragraph (a) above,

and

(b) in paragraph (c), for “and the amount” there is substituted “ , and the amount or amounts notifiable under paragraphs (b) and (ba) above, ”.

(3) In paragraph 5(6A) of that Schedule (Audit Commission to send copy of certification to Secretary of State or National Assembly for Wales), after “the amount” there is inserted “ or amounts ”.

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) In section 38 of the Local Government (Wales) Act 1994 (c. 19) (council funds for principal councils in Wales), after subsection (9) there is inserted—

(9A) The National Assembly for Wales may by regulations make provision for the sharing among a new principal council and major precepting authorities, in accordance with rules specified in the regulations, of an amount equal to all or part of any deduction that, in accordance with provision under paragraph 4(4A) of Schedule 8 to the Local Government Finance Act 1988 (local retention of rates), falls to be made in calculating the council’s non-domestic rating contribution for a financial year.

(8) In subsection (10) of that section (provision that may be included in regulations under subsection (9))—

(a) for “The regulations” there is substituted “ Regulations under subsection (9) or (9A) ”, and

(b) in each of paragraphs (d) and (e), after “the liability mentioned in subsection (9)” there is inserted “ or any liability arising under subsection (9A) ”.

(9) In that section, after subsection (11) there is inserted—

(12) In subsection (9A) “major precepting authority” has the meaning given by section 39(1) of the Local Government Finance Act 1992.

Adjustments for hardship relief

71

(1) Schedule 8 to the 1988 Act (non-domestic rating: pooling) is amended as follows.

(2) In paragraph 4 (non-domestic rating contributions) after sub-paragraph (6) there is inserted—

(7) Sub-paragraph (6) above does not apply to regulations made only for the purpose of amending the rules to increase deductions as regards the operation of section 49 above for the whole or part of the financial year.

(3) In paragraph 6 (calculation of non-domestic rating contributions) after sub-paragraph (6) there is inserted—

(6A) Regulations made for the purpose mentioned in paragraph 4(7) above may include provision— (a) for or in connection with the recalculation of the provisional amount for the financial year concerned, including provision for the procedure to be adopted for recalculation, and (b) as to financial adjustments to be made, including provision for the making of reduced payments under paragraph 5 above or of repayments.

(4) In sub-paragraph (7) of that paragraph (which defines relevant provisions) after paragraph (a) there is inserted—

(aa) regulations made for the purpose mentioned in paragraph 4(7) above,

Provision of information

72

(1) Schedule 9 to the 1988 Act (non-domestic rating: administration) is amended as follows.

(2) In paragraph 5(2) (requested information to be supplied within period of 21 days) there are omitted—

(a) the words “if it is in his possession or control, and he shall do so”, and

(b) the words “and within the period of 21 days beginning with the day on which the notice is served”.

(3) Paragraph 5(3) (offence of failing to supply information) is omitted.

(4) After paragraph 5 there is inserted—

(5A) (1) If a person on whom a notice is served under paragraph 5 above fails to comply with paragraph 5(2) within the period of 56 days beginning with the day on which the notice is served, he shall be liable to a penalty of £100. (2) Where a person becomes liable to a penalty under sub-paragraph (1) above, the valuation officer shall serve on him a notice (a “penalty notice”) stating— (a) that he has failed to comply with paragraph 5(2) above within the period mentioned in sub-paragraph (1) above, (b) that he is liable to a penalty of £100, (c) the effect of sub-paragraphs (3) and (4) below, and (d) that he has a right of appeal under paragraph 5C below. (3) If the person on whom a penalty notice is served fails to comply with paragraph 5(2) within the period of 21 days beginning with the day on which the notice is served, he shall be liable— (a) to a further penalty of £100, and (b) subject to sub-paragraph (4) below, to a further penalty of £20 for each day in respect of which the failure continues after the end of that period. (4) The amount to which a person shall be liable under this paragraph in respect of a failure to comply with a notice served under paragraph 5 above shall not exceed the greater of— (a) the rateable value of the hereditament concerned for the day on which the penalty notice is served, and (b) £500. (5) For the purposes of sub-paragraph (4)(a) above— (a) the hereditament concerned is the hereditament in respect of which the notice under paragraph 5 above was served, and (b) a list compiled under this Part shall be used to find the rateable value of the hereditament for the day concerned. (5B) A valuation officer may mitigate or remit any penalty imposed under paragraph 5A above. (5C) (1) A person may appeal to a valuation tribunal if he is aggrieved by the imposition on him of a penalty under paragraph 5A above. (2) An appeal under this paragraph must be made before the end of the period of 28 days beginning with the day on which the penalty notice is served. (3) An appeal under this paragraph shall not prevent liability to any further penalty or penalties arising under paragraph 5A(3) above. (4) An appeal under this paragraph shall be treated as an appeal against the penalty imposed under paragraph 5A(1) above and any further penalty which may be imposed under paragraph 5A(3) above. (5) On an appeal under this paragraph the valuation tribunal may mitigate or remit any penalty under paragraph 5A above if it is satisfied on either or both of the grounds specified in sub-paragraph (6) below. (6) Those grounds are— (a) that the appellant had a reasonable excuse for not complying with paragraph 5(2) above, or (b) that the information requested is not in the possession or control of the appellant. (5D) (1) Subject to sub-paragraph (2) below, any penalty imposed under paragraph 5A above may be recovered by the valuation officer concerned as a civil debt due to him. (2) No claim to recover any such penalty may be made— (a) before the end of the period mentioned in paragraph 5C(2) above, or (b) if an appeal is made under paragraph 5C above, before the appeal is finally disposed of. (5E) Any sums received by a valuation officer by way of penalty under paragraph 5A above must be paid into the Consolidated Fund. (5F) (1) The Secretary of State in relation to England, and the National Assembly of Wales in relation to Wales, may by regulations make provision in relation to notices served under paragraphs 5 and 5A above. (2) The provision that may be made by regulations under this paragraph includes— (a) provision enabling a valuation officer to request or obtain information for the purpose of identifying the owner or occupier of a hereditament; (b) provision enabling a notice to be served on a person either by name or by such description as may be prescribed. (5G) The Secretary of State in relation to England, and the National Assembly in relation to Wales, may by order amend paragraph 5A above to increase or decrease the amount of any penalty under that paragraph. (5H) Where a valuation officer requires the name or address of a person on whom a notice under paragraph 5 or 5A above is to be served, he may serve a notice on a billing authority which he reasonably believes may have that information requesting the authority to supply him with that information.

(5) In Schedule 11 to the 1988 Act (valuation tribunals) in paragraph 2 (jurisdictions) after sub-paragraph (c) there is inserted—

(ca) paragraph 5C of Schedule 9 above;

Interpretation of Part 5

73

In this Part “the 1988 Act” means the Local Government Finance Act 1988 (c. 41).

Part 6 — Council tax

Liability and amount of tax

Exception of students from joint and several liability

74

(1) In section 6(4) of the Local Government Finance Act 1992 (c. 14) (exception of severely mentally impaired from liability as co-resident or owner), for the words from “paragraph” to “impaired)” there is substituted “ paragraph 2 (severely mentally impaired) or 4 (students etc.) of Schedule 1 to this Act ”.

(2) In section 9(2) of that Act (corresponding exception from liability as spouse), for the words from “paragraph” to the end there is substituted “ paragraph 2 (the severely mentally impaired) or 4 (students etc.) of Schedule 1 to this Act ”.

(3) This section has effect in relation to financial years beginning on or after 1 April 2004.

Second and empty homes

75

(1) After section 11 of the Local Government Finance Act 1992 there is inserted—

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