The Local Government (Prescribed Expenditure) (Amendment) Regulations 1988

Made: 9th March 1988

Laid before Parliament: 9th March 1988

Coming into force: 10th March 1988

The Secretary of State for the Environment and the Secretary of State for Transport[^f00001], as respects England, and the Secretary of State for Wales, as respects Wales, in exercise of the powers conferred on them by sections 75(5) and 84 of, and paragraph 4 of Schedule 12 to, the Local Government, Planning and Land Act 1980[^f00002] and of all other powers enabling them in that behalf, hereby make the following Regulations:

1

• (1) These Regulations may be cited as the Local Government (Prescribed Expenditure) (Amendment) Regulations 1988.

• (2) These Regulations shall come into force on 10th March 1988.

• (3) These Regulations shall cease to have effect on 1st October 1988.

2

The Local Government (Prescribed Expenditure) (Consolidation and Amendment) Regulations 1987[^f00003] are amended as follows—

• (a) in regulation 2, after the definition of “housing association” insert–

• “land”, except where the context otherwise requires, includes buildings and structures on land;

• (b) after regulation 4(1)(d) insert–

(e) land, vehicles, vessels, movable and immovable plant, machinery and apparatus if the authority disposing of the asset had no interest in it immediately before 1st April 1981 and the subsequent acquisition of an interest— (i) did not involve the authority in prescribed expenditure; or (ii) involved expenditure the amount of which was, for the purposes of Part VIII of the Act, nil; (f) land, vehicles, vessels, movable and immovable plant, machinery and apparatus where, if the authority were the party acquiring the asset under the transaction instead of the party disposing of it, the acquisition— (i) would not involve the authority in prescribed expenditure; or (ii) would involve expenditure the amount of which was, for the purposes of Part VIII, nil.

• (c) for paragraph 3 of

Part I — of Schedule 3 substitute–

Signed

Nicholas Ridley — Secretary of State for the Environment — 9th March 1988

Paul Channon — Secretary of State for Transport — 9th March 1988

Peter Walker — Secretary of State for Wales — 9th March 1988

Explanatory note

(This note is not part of the Regulations)

Section 72(3) of the Local Government, Planning and Land Act 1980 limits the prescribed expenditure of a local authority, and other bodies to whom Part VIII of the Act applies, to the aggregate of various amounts including its net capital receipts. “Prescribed expenditure” is expenditure, essentially of a capital nature, described in Schedule 12 to the Act.

The disposal of assets mentioned in section 75(2) of the Act gives rise to capital receipts, from which net capital receipts are derived. The Secretary of State may by regulations provide that the disposal of specified classes of assets does not give rise to capital receipts or gives rise to such receipts only to the extent specified in the regulations. Regulations may also provide that particular expenditure is not to be prescribed expenditure.

Regulation 4 of the Local Government (Prescribed Expenditure) (Consolidation and Amendment) Regulations 1987 lists certain classes of assets on the disposal of which no capital receipt arises. These Regulations, which will cease to have effect on 1st October 1988, make further additions to the list. They relate to situations where no prescribed expenditure was incurred on acquiring the asset.

Regulation 6 and paragraph 3 of Part I of Schedule 3 to the 1987 Regulations provide that, except in the case of a building lease, expenditure on the acquisition of leases of less than twenty years does not constitute prescribed expenditure. These Regulations provide that, in future, only expenditure on leases of three years or less and leases which succeed certain other interests will not constitute prescribed expenditure; and then only in the circumstances specified in these Regulations.

Footnotes

[^f00001]: The functions of the Minister of Transport under section 84(5) of the Local Government, Planning and Land Act 1980 (c. 65) were transferred to the Secretary of State for Transport by article 2(1)(b) of the Transfer of Functions (Transport) Order 1981 (S.I. 1981/238).

[^f00002]: 1980 c. 65.

[^f00003]: S.I. 1987/2186.

[^f00004]: 1954 c. 56.