The Local Government (Promotion of Economic Development) Regulations 1990

Made: 27th March 1990

Laid before Parliament: 29th March 1990

Coming into force: 1st April 1990

The Secretary of State for the Environment, as respects England, and the Secretary of State for Wales, as respects Wales, in exercise of the powers conferred upon them by sections 33(3)(f) and (4), 34(1), (2) and (5), 190 and 191(1) of the Local Government and Housing Act 1989[^f00001], and of all other powers enabling them in that behalf, hereby make the following Regulations:

Citation and commencement

1

These Regulations may be cited as the Local Government (Promotion of Economic Development) Regulations 1990 and shall come into force on 1st April 1990.

Interpretation

2

• (1) In these Regulations, except where the context otherwise requires—

• “the Act” means the Local Government and Housing Act 1989;

• “economic development powers” means the powers conferred by section 33(1) of the Act or any other enactment by virtue of which a relevant authority may promote the economic development of its area;

• “financial assistance” means assistance of any of the descriptions specified in paragraphs (a) to (f) of section 33(3) of the Act;

• “scheduled authority” means a district council in Wales and an authority specified in Schedule 1 to these Regulations.

• (2) For the purposes of these Regulations, a relevant authority shall be regarded as providing financial assistance if, in the exercise of economic development powers, it agrees to provide or joins with any other person in agreeing to provide financial assistance.

Application

3

• (1) Subject to paragraph (2), these Regulations apply—

• (a) where the economic development power in question is that conferred by section 33(1) of the Act, to its exercise on or after 1st April 1990;

• (b) in any other case, where the power is exercised on or after 1st July 1990.

• (2) Nothing in any other provision of these Regulations shall apply to preclude a relevant authority from providing financial assistance in fulfilment of an agreement entered into before 1st April 1990.

Provision of property, services and other financial benefits

4

The condition specified for the purposes of section 33(3)(f) of the Act is that the property, services or other financial benefit is provided for a consideration that is less than the best that can reasonably be obtained.

Excluded activities

5

• (1) Subject to paragraph (2), there are specified for the purposes of section 34(1) of the Act the steps listed in Schedule 2 to these Regulations.

• (2) Nothing in paragraph (1) or Schedule 2 shall preclude an authority from—

• (a) carrying out or participating in estate agency work—

• (i) which consists solely of the publication of information about land; or

• (ii) in connection with the acquisition or disposal of land that adjoins land which the authority proposes to acquire or dispose of;

• (b) carrying out or participating in insurance broking in connection with policies relating to moveable property in any building or on any land of which the occupier is a tenant of the authority;

• (c) publishing a newspaper where the sole or main purpose of such publication is the promotion of the economic development of the authority’s area;

• (d) doing anything which is—

• (i) incidental to the provision by the authority of any training facility, the construction or maintenance of any building or the management of any land in which the authority has an interest; or

• (ii) connected with the promotion of tourism or the provision of information to the public;

• (e) doing anything on behalf of a Minister of the Crown or, in pursuance of the Local Authorities (Goods and Services) Act 1970[^f00002], on behalf of any public body within the meaning of section 1 of that Act.

Excluded forms of financial assistance

6

• (1) Subject to paragraph (3), there are specified for the purposes of section 34(1) of the Act the steps mentioned in paragraph (2).

• (2) The steps referred to in paragraph (1) are the provision of financial assistance of any of the descriptions specified in paragraphs (a) to (c) of section 33(3) of the Act to a person who conducts a business or undertaking with a view to profit where—

• (a) the amount of the assistance is determinable solely by reference to the financial results of that business or undertaking over a period which at the date on which the authority considers the provision of the assistance is not wholly in the past; or

• (b) it is intended that the assistance should be applied, either wholly or in part, in or towards the payment of the wages or salary of any employee of that person.

• (3) Nothing in paragraph (1) or (2) shall preclude a relevant authority from providing financial assistance by way of grant which—

• (a) is made for the purpose of enabling the recipient—

• (i) to employ a person who, for the period of at least seven days immediately preceding the commencement of the employment, was unemployed;

• (ii) to employ a person for the duration of any period in which he is undergoing training;

• (iii) to employ not more than three persons who are qualified to provide some particular knowledge or skill required for the purposes of the business or undertaking; or

• (b) is provided as part of a scheme to which contributions are made by a Minister of the Crown or the European Commission.

Restrictions on exercise of economic development powers

7

• (1) Subject to paragraphs (2) and (3), a relevant authority that is not a scheduled authority shall not, in the exercise of economic development powers, in any financial year provide financial assistance of any of the descriptions specified in section 33(3)(a) to (e) of the Act or by accepting or purchasing any bill of exchange within the meaning of the Bills of Exchange Act 1882[^f00003]—

• (a) to any person whose undertaking or business is conducted with a view to profit; or

• (b) to any voluntary organisation for the purposes of enabling that organisation to make a grant or loan or give a guarantee to a person whose business or undertaking is conducted with a view to profit,

where the total value or amount of that assistance in that year exceeds £10,000.

• (2) Nothing in paragraph (1) shall preclude an authority from providing such assistance as is mentioned in regulation 6(3).

• (3) Nothing in paragraph (1) shall preclude a county council from doing anything if any scheduled authority in the county could do it.

Consultation with other authorities

8

• (1) There are specified for the purposes of section 34(1) of the Act the steps mentioned in paragraphs (2) and (3).

• (2) The step mentioned in this paragraph is the provision, after 1st April 1991, by a relevant authority which is not a local education authority within the meaning of the Education Act 1944[^f00004], to a person who is not a member, officer or other employee of the authority, of training or education services other than those included within a programme of such services which the local education authority for the area in which the services are to be provided has approved.

• (3) The steps mentioned in this paragraph are—

• (a) the acquisition by a relevant authority of any land outside its area; or

• (b) the provision of financial assistance for the acquistion or improvement by any other person of any such land, or the acquisition or improvement of plant or machinery in, on or under, any such land,

otherwise than after consultation with such authority for the area in which the land in question is situated as is mentioned in the Table below.

Loans

9

• (1) Where a relevant authority in the exercise of economic development powers provides financial assistance in the form of a loan and the rate of interest in respect of that loan is more favourable than that reasonably obtainable on the open market, the accounts of that authority for each financial year in which an amount of principal is outstanding as respects any such loan, shall include a separate account of—

• (a) the amount of any such loan;

• (b) the difference between the amount of interest payable in that year in respect of that loan and the amount which would have been payable in that year if interest on that loan had been payable at the rate prevailing in the market for a loan of that nature.

• (2) A copy of a statement of the account required to be kept in accordance with paragraph (1) shall be deposited with the proper officer of the authority at the time that a statement of the authority’s accounts is published in accordance with regulations under section 23 of the Local Government Finance Act 1982[^f00005].

SCHEDULE 1 — SCHEDULED AUTHORITIES

• In the county of Avon Bristol City Council Woodspring District Council

• In the county of Cambridgeshire East Cambridgeshire District Council Fenland District Council Huntingdonshire District Council

• In the county of Cheshire Chester City Council Congleton Borough Council Crewe and Nantwich Borough Council Ellesmere Port and Neston Borough Council Halton Borough Council Macclesfield Borough Council Vale Royal Borough Council Warrington Borough Council

• In the county of Cleveland Hartlepool Borough Council Langbaurgh-on-Tees Borough Council Middlesbrough Borough Council Stockton-on-Tees Borough Council

• In the county of Cornwall Caradon District Council Carrick District Council Kerrier District Council North Cornwall District Council Penwith District Council Restormel District Council

• In the county of Cumbria Allerdale District Council Barrow-in-Furness Borough Council Carlisle City Council Copeland Borough Council Eden District Council South Lakeland District Council

• In the county of Derbyshire Amber Valley Borough Council Bolsover District Council Chesterfield Borough Council Derby City Council Derbyshire Dales District Council Erewash Borough Council High Peak Borough Council North East Derbyshire District Council South Derbyshire District Council

• In the county of Devon East Devon District Council Exeter City Council Mid-Devon District Council North Devon District Council Plymouth City Council South Hams District Council Teignbridge District Council Torbay Borough Council Torridge District Council West Devon Borough Council

• In the county of Dorset West Dorset District Council

• In the county of Durham Chester-le-Street District Council Darlington Borough Council Derwentside District Council Durham City Council Easington District Council Sedgefield District Council Teesdale District Council Wear Valley District Council

• In the county of East Sussex Rother District Council

• In the county of Essex Tendring District Council

• In the county of Gloucestershire Forest of Dean District Council

• In Greater London The council of the— London Borough of Brent London Borough of Ealing London Borough of Greenwich London Borough of Hackney London Borough of Hammersmith and Fulham London Borough of Haringey London Borough of Islington Royal Borough of Kensington and Chelsea London Borough of Lambeth London Borough of Lewisham London Borough of Newham London Borough of Southwark London Borough of Tower Hamlets London Borough of Wandsworth

• In the county of Greater Manchester Bolton Borough Council Bury Borough Council Manchester City Council Oldham Borough Council Rochdale Borough Council Salford City Council Stockport Borough Council Tameside Borough Council Trafford Borough Council Wigan Borough Council

• In the county of Hereford and Worcester Bromsgrove District Council Hereford City Council Leominster District Council Malvern Hills District Council Redditch Borough Council South Herefordshire District Council Worcester City Council Wychavon District Council Wyre Forest District Council

• In the county of Humberside Boothferry Borough Council Cleethorpes Borough Council East Yorkshire Borough of Beverley Borough Council East Yorkshire Borough Council Glanford Borough Council Great Grimsby Borough Council Holderness Borough Council Kingston upon Hull City Council Scunthorpe Borough Council

• In the county of Isle of Wight Medina Borough Council South Wight Borough Council

• In the Isles of Scilly The Council of the Isles of Scilly

• In the county of Kent Ashford Borough Council Shepway District Council Thanet District Council

• In the county of Lancashire Blackburn Borough Council Blackpool Borough Council Burnley Borough Council Chorley Borough Council Fylde Borough Council Hyndburn Borough Council Lancaster City Council Pendle Borough Council Preston Borough Council Ribble Valley Borough Council Rossendale Borough Council South Ribble Borough Council West Lancashire District Council Wyre Borough Council

• In the county of Leicestershire Blaby District Council Harborough District Council Hinckley and Bosworth Borough Council Leicester City Council North West Leicestershire District Council Rutland District Council

• In the county of Lincolnshire Boston Borough Council East Lindsey District Council Lincoln City Council North Kesteven District Council South Holland District Council South Kesteven District Council West Lindsey District Council

• In the county of Merseyside Knowsley Borough Council Liverpool City Council St. Helens Borough Council Sefton Borough Council Wirral Borough Council

• In the county of Norfolk Breckland District Council Broadland District Council Great Yarmouth Borough Council King’s Lynn and West Norfolk Borough Council North Norfolk District Council

• In the county of Northamptonshire Corby District Council East Northamptonshire District Council

• In the county of Northumberland Alnwick District Council Berwick-upon-Tweed Borough Council Blyth Valley Borough Council Castle Morpeth Borough Council Tynedale District Council Wansbeck District Council

• In the county of North Yorkshire Craven District Council Hambleton District Council Harrogate Borough Council York City Council Richmondshire District Council Ryedale District Council Scarborough Borough Council Selby District Council

• In the county of Nottinghamshire Ashfield District Council Bassetlaw District Council Broxtowe Borough Council Gedling Borough Council Mansfield District Council Newark and Sherwood District Council Nottingham City Council Rushcliffe Borough Council

• In the county of Shropshire Bridgnorth District Council North Shropshire District Council Oswestry Borough Council Shrewsbury and Atcham Borough Council South Shropshire District Council The Wrekin District Council

• In the county of Somerset Sedgemoor District Council South Somerset District Council Taunton Deane Borough Council West Somerset District Council

• In the county of South Yorkshire Barnsley Borough Council Doncaster Borough Council Rotherham Borough Council Sheffield City Council

• In the county of Staffordshire Cannock Chase District Council East Staffordshire District Council Lichfield District Council Newcastle-under-Lyme District Council South Staffordshire District Council Stafford Borough Council Staffordshire Moorlands District Council Stoke-on-Trent City Council Tamworth Borough Council

• In the county of Suffolk Mid-Suffolk District Council Suffolk Coastal District Council Waveney District Council

• In the county of Tyne and Wear Gateshead Metropolitan Borough Council Newcastle upon Tyne City Council North Tyneside Borough Council South Tyneside Borough Council Sunderland Borough Council

• In the county of Warwickshire North Warwickshire Borough Council Nuneaton and Bedworth Borough Council Rugby Borough Council Stratford-on-Avon District Council Warwick District Council

• In the county of West Midlands Birmingham City Council Coventry City Council Dudley Borough Council Sandwell Borough Council Solihull Borough Council Walsall Borough Council Wolverhampton Borough Council

• In the county of West Yorkshire Bradford City Council Calderdale Borough Council Kirklees Borough Council Leeds City Council Wakefield City Council

SCHEDULE 2 — EXCLUDED ACTIVITIES

For the purposes of regulation 5(1) of these Regulations, the steps are—

• (a) the carrying out of, or participation in—

• (i) deposit-taking business within the meaning of the Banking Act 1987[^f00006];

• (ii) investment business within the meaning of the Financial Services Act 1986[^f00007];

• (iii) insurance business that is long term business or general business within the meaning of the Insurance Companies Act 1982[^f00008];

• (iv) insurance broking in relation to any matter in respect of which no relevant authority has an insurable interest;

• (v) estate agency work within the meaning of the Estate Agents Act 1979[^f00009];

• (b) the audit of, or report on, a company’s accounts pursuant to sections 236 and 237 of the Companies Act 1985[^f00010];

• (c) the preparation for reward of any document which effects or is instrumental in effecting the transfer of land in respect of which no relevant authority has an interest;

• (d) the giving for reward of any opinion in writing as to the value of any land in which no relevant authority has an interest;

• (e) the acquisition of an interest in any undertaking which publishes any matter by television, radio transmission or by means of any newspaper as defined in section 1 of the Newspaper Libel and Registration Act 1881[^f00011]; and the publication of any newspaper as so defined;

• (f) the purchase of goods for resale or hiring;

• (g) the sale or hiring out of goods as the agent of another person;

• (h) the acquisition of services for supply to others;

• (i) he supply of services as the agent of another person;

• (j) the purchase of goods or the employment of persons for the purpose of the manufacture of goods.

Signed

Chris Patten — Secretary of State for the Environment — 27th March 1990

Peter Walker — Secretary of State for Wales — 27th March 1990

Explanatory note

(This note is not part of the Regulations)

These Regulations impose restrictions on the exercise by relevant authorities in England and Wales (London borough councils, county councils, district councils, the Common Council of the City of London and the Council of the Isles of Scilly) of powers to promote the economic development of their areas.

The Regulations have effect on and after 1st April 1990 where the power is that conferred by section 33(1) of the Local Government and Housing Act 1989. In other cases they have effect from 1st July 1990 except in relation to assistance provided pursuant to arrangements concluded before 1st April 1990 (regulation 3).

Regulation 4 provides that a relevant authority is to be treated as providing financial assistance under section 33(3)(f) of the 1989 Act if it provides or agrees to provide a person with property, services or other financial benefit for consideration less than the best reasonably obtainable.

Regulation 5 and Schedule 2 specify activities which may not be carried out by a relevant authority in the exercise of its economic development powers.

Regulations 6 and 7 prohibit the provision, in the exercise of economic development powers, of certain kinds of assistance. The prohibitions contained in regulation 7 do not apply to the authorities listed in Schedule 1, district and county councils in Wales and, to a limited extent, county councils in England.

Regulation 8 imposes on a relevant authority which proposes to provide training or education services as part of a programme, a requirement that the local education authority shall have approved that programme. In relation to assistance of certain kinds the regulation imposes a requirement to consult other authorities.

Regulation 9 requires a relevant authority which makes a loan at a rate of interest that is less than the market rate to keep a separate account showing the difference between the market rate and the rate actually charged.

Footnotes

[^f00001]: 1989 c. 42.

[^f00002]: 1970 c. 39.

[^f00003]: 1882 c. 61.

[^f00004]: 1944 c. 31.

[^f00005]: 1982 c. 32.

[^f00006]: 1987 c. 22.

[^f00007]: 1986 c. 60.

[^f00008]: 1982 c. 50.

[^f00009]: 1979 c. 38.

[^f00010]: 1985 c. 6.

[^f00011]: 1881 c. 60.