Local Government Act 2003 (c. 26)

(The document as of February, 2008)

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Chapter 3 General

23 "Local authority"

(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) the Greater London Magistrates' Courts Authority;

(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 services, civil defence and transport);

(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 authority constituted by a combination scheme;

(n) a police authority established under section 3 of the Police Act 1996 (c. 16);

(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.

24 Wales

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 National Assembly for Wales.

Part 2 Financial administration

25 Budget calculations: report on robustness of estimates etc

(1) Where an authority to which section 32 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), or

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

26 Minimum reserves

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

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

(b) section 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.

27 Budget calculations: report on inadequacy of controlled reserve

(1) This section applies where an authority to which section 32 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.

28 Budget monitoring: general

(1) Where in relation to a financial year an authority to which section 32 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 32(4) or 43(4) of the Local Government Finance Act 1992 (c. 14) (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.

29 Budget monitoring: Greater London Authority

(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.

30 Authorisation of agreements during the prohibition period

(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

(6B) Authority for the purposes of subsection (6) above shall--

(a) be in writing,

(b) identify the ground on which it is given, and

(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

31 Power to pay grant

(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.

32 Application to Greater London Authority

(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.

33 Interpretation of Chapter 1

(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) the Greater London Magistrates' Courts Authority;

(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 services, civil defence and transport);

(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 authority constituted by a combination scheme;

(m) a police authority established under section 3 of the Police Act 1996 (c. 16).

(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

34 Best value grant: parishes

(1) The following are best value authorities for the purposes of this section--

(a) a parish council subject to any of the duties in sections 3 to 6 of the Local Government Act 1999 (best value duties), and

(b) a parish meeting subject to any of those duties.

(2) For each financial year, the Secretary of State may, with the consent of the Treasury, pay grants in accordance with this section to best value authorities towards expenditure incurred or to be incurred by them in connection with any of the requirements of Part 1 of the Local Government Act 1999 (best value).

(3) The power under subsection (2) shall be exercisable by the making of a determination stating in relation to each best value authority the amount of grant, if any, which the Secretary of State intends to make to it for each year to which the determination relates.

(4) A determination under this section may include provision for grant paid pursuant to the determination to be subject to specified conditions.

(5) The conditions which may be included under subsection (4) shall be such as the Secretary of State thinks fit and may, in particular, make provision about--

(a) the supply of information,

(b) the use of grant, or

(6) A determination under this section--

(a) may make different provision for different cases or areas;

(b) may be made before, during or after the end of a financial year to which it relates;

(7) The power under subsection (6)(a) includes, in particular, the power to make different provision for different best value authorities or descriptions of authority (including descriptions framed by reference to authorities in particular areas).

(8) Grant due to a best value authority in accordance with a determination under this section shall be payable at such time, or in such instalments and at such times, as the Secretary of State may think fit.

(9) A grant made under this section to a parish meeting shall be paid to the parish trustees for the parish in question.

35 Best value grant: communities

(1) For the purposes of this section a best value authority is a community council subject to any of the duties in sections 3 to 6 of the Local Government Act 1999 (c. 27).

(2) For each financial year, the National Assembly for Wales may pay grants in accordance with this section to best value authorities towards expenditure incurred or to be incurred by them in connection with any of the requirements of Part 1 of the Local Government Act 1999.

(3) The power under subsection (2) shall be exercisable by the making of a determination stating in relation to each best value authority the amount of grant, if any, which the Assembly intends to make to it for each year to which the determination relates.

(4) A determination under this section may include provision for grant paid pursuant to the determination to be subject to specified conditions.

(5) The conditions which may be included under subsection (4) shall be such as the Assembly thinks fit and may, in particular, make provision about--

(a) the supply of information,

(b) the use of grant, or

(6) A determination under this section--

(a) may make different provision for different cases or areas;

(b) may be made before, during or after the end of a financial year to which it relates;

(8) Grant due to a best value authority in accordance with a determination under this section shall be payable at such time, or in such instalments and at such times, as the Assembly may think fit.

36 Grants in connection with designation for service excellence

(1) The appropriate person may pay any of the following to a best value authority subject to any of the duties in sections 3 to 6 of the Local Government Act 1999 (best value duties)--

(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.

37 Emergency financial assistance to combined fire authorities

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. "

38 Loans by Public Works Loan Commissioners

(1) The Secretary of State may, if he thinks it appropriate, make payments to the Public Works Loan Commissioners so as to reduce or extinguish such debt (whether then due or not) of a local authority in England to those Commissioners as he thinks fit.

(2) The National Assembly for Wales may, if it thinks it appropriate, make payments to the Public Works Loan Commissioners so as to reduce or extinguish such debt (whether then due or not) of a local authority in Wales to those Commissioners 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 Commissioners.

(4) The Commissioners 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.

39 Payments towards local authority indebtedness

(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 Public Works Loan Commissioners.

(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, a county council or a county borough council.

40 Local government finance reports: Wales

(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

41 Arrangements with respect to business improvement districts

(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.

42 Joint arrangements

(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.

43 Additional contributions and action

(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

44 Duty to comply with arrangements

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

BID levy

45 BID levy

(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.

46 Liability for BID levy

(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

47 BID Revenue Account

(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.

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