(1)The Secretary of State may—
(a)out of money provided by Parliament and subject to such conditions as he thinks fit to impose, make payment under this paragraph (except for the purpose mentioned in paragraph (b) below), by way of grant to a new water and sewerage authority—
(i)in respect of the exercise of their functions; and
(ii)in respect of their administrative expenses;
(b)out of money so provided, make payment under this paragraph by way of grant to such an authority for the purpose of meeting, or alleviating, any loss they may sustain—
(i)by reason of their complying with a direction given under section 117 of this Act; or
(ii)by virtue of regulations made under section 81 of this Act,
of such sums as he may, with the consent of the Treasury, determine.
(2)Subject to subsection (7) below, for the purpose of the exercise of any of their functions, a new water and sewerage authority—
(a)may, subject to such conditions as, with the consent of the Treasury, the Secretary of State thinks fit to impose, borrow from him, and he may lend to them, sums of such amounts as he may, with such consent, determine; and
(b)may, with the consent of the Secretary of State given with the approval of the Treasury, borrow money, whether in sterling or otherwise, from any other person or body, whether in the United Kingdom or elsewhere.
(3)Where a body (whether the Board or a local authority) whose property, rights and liabilities are to be transferred to a new water and sewerage authority under a transfer scheme, is liable to repay an amount borrowed, sums lent to the new water and sewerage authority under paragraph (a) of subsection (2) above may, without prejudice to the generality of that paragraph, include sums to be paid by them to the body for the purpose of enabling the body, before the transfer date, to make such repayment; and a body who receive an amount from a new water and sewerage authority by virtue of this subsection shall, in accordance with any direction to them under this subsection by the Secretary of State, use the amount for that purpose.
(4)Any loans made in pursuance of subsection (2)(a) above shall be repaid to the Secretary of State at such times and by such methods, and interest on the loans shall be paid to him at such times and at such rates, as he may from time to time, with the consent of the Treasury, direct.
(5)The Treasury may issue, out of the National Loans Fund, to the Secretary of State such sums as are necessary to enable him to make loans in pursuance of subsection (2)(a) above; and any sums received by him in pursuance of subsection (4) above shall be paid into that fund.
(6)It shall be the duty of the Secretary of State, as respects each financial year—
(a)to prepare, in such form and manner as the Treasury may direct, an account of sums issued to the Secretary of State in pursuance of subsection (5) above, of any sums required to be paid into the National Loans Fund in pursuance of that subsection and of the disposal by him of the respective sums; and
(b)to send a copy of the account to the Comptroller and Auditor General not later than the end of the month of November next following that financial year;
and the Comptroller and Auditor General shall examine, certify and report on the account and shall lay copies of it, and of his report on it, before each House of Parliament.
(7)The aggregate amount outstanding, otherwise than by way of interest, in respect of—
(a)all lending to the new water and sewerage authorities under subsection (2) above; and
(b)all amounts borrowed which those authorities are liable to repay by virtue of section 91(1) of this Act,
shall not exceed £3,000 million, or such greater sum not exceeding £4,500 million as the Secretary of State may, with the consent of the Treasury, by order specify.
(8)An order made under subsection (7) above shall not be made unless a draft of the order has been laid before, and approved by resolution of, the Commons House of Parliament.