The Local Authorities (Capital Finance and Approved Investments) (Amendment No. 2) Regulations 1995

law://uk/uksi/1995/1982@2026-11-12

Contents

1Commencement and citation#

These Regulations may be cited as the Local Authorities (Capital Finance and Approved Investments) (Amendment No. 2) Regulations 1995 and shall come into force on 24th August 1995.

2Amendment of Regulations#

The Local Authorities (Capital Finance) Regulations 1990 shall be amended in accordance with the provisions of regulations 3 to 11 of these Regulations.

3Expenditure not to be expenditure for capital purposes#

In regulation 3—

(a)at the beginning insert “(1)”; and

(b)at the end add the following paragraphs—“2 Expenditure by a local authority which would otherwise be expenditure for capital purposes by virtue of section 40(4) shall not be expenditure for capital purposes if it is relevant expenditure.3 In this regulation—• “relevant expenditure” means expenditure by a local authority on the making of an investment, where—(a) the authority apply a relevant amount to meet the expenditure in question; and(b) the investment consists of a deposit made with, or any security or other instrument issued by, an institution or building society (in this paragraph referred to as “the relevant body”) which was liable to pay a relevant amount;• “relevant amount” means any amount which—(a) is due to the authority under an investment which is an approved investment under regulation 2(b) or (c) of the Local Authorities (Capital Finance) (Approved Investments) Regulations 1990; and(b) becomes payable by the relevant body, before the date on which the authority are entitled under the terms of the investment to require it to be repaid or redeemed, by reason of a default or breach of covenant on the part of the relevant body in relation to the payment of the principal sum deposited or interest.”

4Expenditure excluded from section 41(1)#

After regulation 4 insert the following regulation—“4A 1 Expenditure by a local authority which would otherwise not be expenditure falling within section 42(2) shall be expenditure falling within that section if it is relevant expenditure.2 The following expenditure shall be expenditure falling within section 42(2)—a expenditure consisting of the application of relevant amounts for any of the purposes specified in regulation 26B(1) or (3);b expenditure consisting of the transfer of relevant amounts to any of the bodies specified in regulation 26B(2); andc expenditure consisting of the application of relevant amounts to meet any liability of a local authority in respect of any levy payable under section 136 of the Leasehold Reform, Housing and Urban Development Act 1993.3 In this regulation—• “relevant amounts” means any amounts for the time being set aside by the authority (whether voluntarily or pursuant to a requirement under Part IV of the Act) as provision to meet credit liabilities; and• “relevant expenditure” has the same meaning as in regulation 3(3) above.”

5Variation of credit arrangements#

In regulation 8, in paragraph (4)—

(a)omit the words “falling within regulation 7(3) above”; and

(b)in sub-paragraph (b), for “regulation 7(5F)” substitute “regulation 7(5C), (5D) or (5F)”.

6Sums not to be capital receipts#

In regulation 13, after paragraph (2) add the following paragraphs—“3 Any sums received by a local authority in respect of the disposal of any investment which, at the time of disposal, is not an approved investment shall not be capital receipts if—a by virtue of regulation 4(2) above, the expenditure by the authority on making the investment was expenditure falling within section 42(2); orb the investment was an approved investment under regulation 2(b) or (c) of the Local Authorities (Capital Finance) (Approved Investments) Regulations 1990 (“the 1990 Regulations”), and has ceased to be an approved investment because—i where the deposit which constitutes the investment was made with an authorised institution, that institution has ceased to be an authorised institution within the meaning of regulation 1(2) of the 1990 Regulations; orii where the deposit which constitutes the investment was made with a building society, that building society has ceased to be a building society within the meaning of regulation 2(c) of the 1990 Regulations.”

7Reserved part of capital receipts#

(1)In regulation 14—

(a)in paragraphs (1) and (2), for the words “Subject to paragraphs (3) to (9) below” substitute “Subject to paragraphs (3) to (16) below”; and

(b)insert the following paragraphs after paragraph (9)—“10 For the purposes of section 59(3), the reserved part of a capital receipt shall be 10 per cent. in the case of a receipt derived from the disposal by a local authority of any freehold or leasehold interest in land where—a the receipt is received during the period beginning on 1st September 1995 and ending on 31st August 1996;b the land is not land to which section 74(1) applied immediately before the disposal;c the whole of the land—i was in use as a car park on 23rd March 1995; orii ceased to be used as a car park not more than 12 months before that date; oriii had on that date the benefit of a planning permission granted on or after 23rd March 1993 for the provision or use of a car park for an unlimited period or a period of not less than five years; andd if, on the date of the disposal, the land has ceased to be used as a car park, it has not, since the date on which it ceased to be used as a car park, been used under a planning permission granted for any other use for a period of more than five years.11 For the purposes of section 59(3), the reserved part of a capital receipt shall be the percentage determined in accordance with paragraph (12) below in the case of a receipt which is derived from the disposal by a local authority of any freehold or leasehold interest in any land (in this paragraph and in paragraphs (12), (13) and (14) below referred to as “the land”) where—a on the date of the disposal, the land in whole or part comprises shops;b the receipt is received during the period beginning on 1st September 1995 and ending on 31st August 1996; andc the land is not land to which section 74(1) applied immediately before the disposal.12 For the purposes of paragraph (11) above—a where the whole of the land comprises shops, the reserved part of the capital receipt shall be 10 per cent. of the receipt; andb where a part of the land comprises shops, the reserved part of the capital receipt shall be the amount which, but for this paragraph, would be the reserved part of the receipt less the amount, if any, by which the product of the formula (C×D×E) exceeds the product of the formula (F×D×E).13 For the purposes of paragraph (12)(b) above—• C is the percentage of the capital receipt which, but for paragraph (12), would be the reserved part;• D is the percentage of the notional value of the land, estimated immediately before the disposal, which is attributable to the part of the land comprising shops;• E is the capital receipt; and• F is 10 per cent.14 In paragraphs (11) to (13) above—a a reference to the notional value of the land is a reference to the capital sum which would be paid for the grant of a leasehold interest in the land for a term of 999 years on the assumption that the lease reserved a nominal rent and that the lessee would have vacant possession; andb “shops” includes—i all buildings and all parts of any building on the land which are constructed or adapted for use as a shop; andii all other parts of the land which are in use for the purposes of, or in connection with, the business of a shop on the land, or are intended for use for the purposes of, or in connection with, such a business (whether or not they are being so used).15 For the purposes of section 59(3), the reserved part of a capital receipt shall be 10 per cent. in the case of a receipt which does not fall within paragraph (11) above, and is derived from the disposal by a local authority of any freehold or leasehold interest in any land (in this paragraph referred to as “the land”) where—a the receipt is received during the period beginning on 1st September 1995 and ending on 31st August 1996;b the land is not land to which section 74(1) applied immediately before the disposal; andc the land had, on 23rd March 1995, the benefit of a planning permission granted on or after 23rd March 1993 for the provision or use of shops for an unlimited period or a period of not less than five years.16 For the purposes of section 59(3), the reserved part of a capital receipt shall be 10 per cent. in the case of a receipt which—a is derived from the disposal by a local authority of any freehold or leasehold interest in land comprising a crematorium within the meaning of section 2 of the Cremation Act 1902; andb is received during the period beginning on 1st January 1996 and ending on 30th June 1997.”

(2)In Part I of Schedule 1, in paragraph 6, substitute for sub-paragraph (b) the following sub-paragraph—“b at the time the receipts are received, the authority have no money outstanding by way of borrowing other than—i short-term borrowing (within the meaning of section 45(6));ii borrowing undertaken under section 5 of the City of London (Various Powers) Act 1924; oriii borrowing undertaken before 24th August 1995, other than borrowing by the issue of stock on or after 15th December 1993, from a person who is not a relevant lender as defined for the purposes of Part VIIIA in regulation 26A;”

8Minimum revenue provision for subsequent financial years#

In regulation 26—

(a)in paragraph (1), for the words “Subject to paragraphs (5) to (13) below” substitute “Subject to paragraphs (5) to (16) below”; and

(b)at the end add the following paragraphs—“14 This paragraph applies to a county council of which a committee was a police authority before the establishment of new police authorities under section 3 of the Police Act 1964 (as substituted by section 2 of the Police and Magistrates' Courts Act 1994).15 In relation to a county council to which paragraph (14) above applies, the amount in respect of principal for the purposes of paragraph 15(1)(a) of Schedule 3 to the Act shall, for the financial year beginning on 1st April 1995, be the amount determined under paragraph (1) above as if the council’s credit ceiling on 31st March 1995 had been reduced by the amount, if any, by which amount A exceeds amount B, where—a amount A is the police amount; andb amount B is the total amount, if any, by which the council’s credit ceiling is increased on 24th August 1995 in accordance with paragraph 10C of Schedule 3 to the Act.16 In paragraph (15) above, “the police amount” means the police amount for the council for 31st March 1995 determined in accordance with sub-paragraph (2) of paragraph 10B of Schedule 3 to the Act.”

9Use of amounts set aside to meet credit liabilities#

In regulation 26A—

(a)for the definition of “relevant authority” substitute the following—““relevant authority” means a local authority in England whose credit ceiling, as determined under Part III of Schedule 3 to the Act, is, on the relevant date for any financial year, a negative amount, and who have no money outstanding by way of borrowing other than—a short-term borrowing (within the meaning of section 45(6));b borrowing undertaken under section 5 of the City of London (Various Powers) Act 1924; orc borrowing undertaken before 24th August 1995, other than borrowing by the issue of stock on or after 15th December 1993, from a person who is not a relevant lender.”

(b)at the end add the following—““relevant lender” means the Public Works Loan Board, the Bank of England, the European Investment Bank, a body mentioned in any of paragraphs 1 to 17, or in paragraph 28 or 29, of Part II of the Schedule to the Local Authorities (Capital Finance) (Approved Investments) Regulations 1990, an authorised institution within the meaning of the Banking Act 1987 or a building society within the meaning of the Building Societies Act 1986.”

10Modification of the credit ceiling#

In Part II of Schedule 3—

(a)for paragraph 3 substitute the following—“3 A local authority’s credit ceiling at any time on or after 24th August 1995 shall be determined in accordance with Part III of Schedule 3 to the Act subject to the following modifications—a no account shall be taken of any amount set aside by the authority by virtue of regulation 26(1)(e), andb where, at any time, amounts for the time being set aside by the authority (whether voluntarily or pursuant to a requirement under Part IV of the Act) as provision to meet credit liabilities are applied by the authority under section 136(8) of the Leasehold Reform, Housing and Urban Development Act 1993, the authority’s credit ceiling shall, at that time, be increased by an amount equal to the amount so applied.”

(b)in paragraph 4—

(i)after “For the purposes of this paragraph” insert “and paragraph 5 below”, and for “modification” in sub-paragraph (2) substitute “modifications”; and

(ii)in the modification to Schedule 3 to the Act, for “10C. In paragraphs 10A and 10B above” substitute “10D. In paragraphs 10A, 10B and 10C above”; and

(c)after paragraph 4 insert the following paragraph—“5 1 For the purposes of this paragraph, “new police authority” means a police authority established under section 3 of the Police Act 1964 (as substituted by section 2 of the Police and Magistrates' Courts Act 1994) for a police area.2 In relation to—a a new police authority whose credit ceiling on 1st April 1995 was determined in accordance with paragraph 10B(1) of Schedule 3 to the Act; andb a local authority which is a relevant county council,in addition to the modifications made in paragraphs 3 and 4 above, Schedule 3 to the Act is modified by the insertion after paragraph 10B of the following paragraph—10C 1 In this paragraph—• “the council”, in relation to a new police authority, means the county council of which a committee was the old police authority in accordance with section 2 or 3(4) of the 1964 Act;• “the Order” means the Police and Magistrates' Courts Act 1994 (Commencement No. 5 and Transitional Provisions) Order 1994; and• “retained arrangement” means a credit arrangement in relation to property, rights and liabilities which have not vested in a new police authority under article 9 of the Order, or have been apportioned under that article.2 Where the credit ceiling of a new police authority on 1st April 1995 has been determined in accordance with paragraph 10B(1) above—a the credit ceiling of the new police authority on 24th August 1995 shall be reduced by the amount, if any, which that authority are deemed to have borrowed from the council by virtue of article 11 of the Order; andb the credit ceiling on 24th August 1995 of the council shall be increased by that amount.3 Where the credit ceiling of a new police authority on 1st April 1995 has been determined in accordance with paragraph 10B(1) above, and includes an amount attributable to the use by the council of a credit approval as authority to enter into or agree to a variation of a retained arrangement—a the credit ceiling of the new police authority on 24th August 1995 shall be reduced by an amount determined for each such arrangement in accordance with sub-paragraph (4) below; andb the credit ceiling on 24th August 1995 of the council shall be increased by an equivalent amount for each such arrangement.4 For the purposes of sub-paragraph (3)(a) above, the amount to be determined for a retained arrangement is either—a the amount equal to the extent to which a credit approval has been used as authority to enter into or agree to a variation of the arrangement less the total amount set aside from the revenue account of the council as provision for credit liabilities in relation to the arrangement (otherwise than in accordance with a determination under section 50(3)(c) of the Act); orb where a proportion has been agreed under article 9 of the Order for the purposes of apportioning the property, rights and liabilities relating to the arrangement, that proportion of the amount referred to in paragraph (a) above.”

11Housing and non-housing amounts for subsequent financial years#

In paragraph 6 of Schedule 5—

(a)in paragraph (i) of sub-paragraph (a), for “in accordance with paragraph 14(2) of Schedule 3 to the Act” substitute “in accordance with paragraph 10C(2)(b) or (3)(b) or 14(2) of Schedule 3 to the Act or in accordance with paragraph 3(b) of Schedule 3 above,”; and

(b)in paragraph (i) of sub-paragraph (b), for “paragraph 12(1) or 14(1)” substitute “paragraph 10B(1)(b), 12(1) or 14(1)”.

12Approved investments#

The Local Authorities (Capital Finance) (Approved Investments) Regulations 1990 shall be amended—

(a)in regulation 1(2), after the definition of “gilt-edged securities”, by inserting the following—“• “relevant lender” means the Public Works Loan Board, the Bank of England, the European Investment Bank, a body mentioned in any of paragraphs 1 to 17, or in paragraph 28 or 29, of Part II of the Schedule to these Regulations, an authorised institution or a building society within the meaning of the Building Societies Act 1986;”

(b)in regulation 3(3), by substituting for sub-paragraph (c) the following sub-paragraph—“c the authority making the investment, at the beginning of the financial year in which the investment is made, have a credit ceiling, as determined under Part III of Schedule 3 to the Local Government and Housing Act 1989, which is nil or a negative amount, and, at the time the investment is made, have no money outstanding by way of borrowing other than—i short-term borrowing (within the meaning of section 45(6) of that Act);ii borrowing undertaken under section 5 of the City of London (Various Powers) Act 1924; oriii borrowing undertaken before 24th August 1995, other than borrowing by the issue of stock on or after 15th December 1993, from a person who is not a relevant lender.”

Contains public sector information licensed under the Open Government Licence v3.0.

The Local Authorities (Capital Finance and Approved Investments) (Amendment No. 2) Regulations 1995

The Local Authorities (Capital Finance and Approved Investments) (Amendment No. 2) Regulations 1995

1Commencement and citation#

2Amendment of Regulations#

3Expenditure not to be expenditure for capital purposes#

4Expenditure excluded from section 41(1)#

5Variation of credit arrangements#

6Sums not to be capital receipts#

7Reserved part of capital receipts#

8Minimum revenue provision for subsequent financial years#

9Use of amounts set aside to meet credit liabilities#

10Modification of the credit ceiling#

11Housing and non-housing amounts for subsequent financial years#

12Approved investments#

Connections

Defined terms · 9

History · 1 version

Key facts

1Commencement and citation#

2Amendment of Regulations#

3Expenditure not to be expenditure for capital purposes#

4Expenditure excluded from section 41(1)#

5Variation of credit arrangements#

6Sums not to be capital receipts#

7Reserved part of capital receipts#

8Minimum revenue provision for subsequent financial years#

9Use of amounts set aside to meet credit liabilities#

10Modification of the credit ceiling#

11Housing and non-housing amounts for subsequent financial years#

12Approved investments#