The Local Government Reorganisation (Wales) (Capital Finance) Order 1995

Explanatory Note

(This note is not part of the Order)

The Local Government (Wales) Act 1994 (“the 1994 Act”) provides for local government changes in Wales. The new Welsh local authorities will be elected on 4th May 1995. This Order makes provision with respect to the application of Part IV (“Part IV”) of the Local Government and Housing Act 1989 (“the 1989 Act”) (revenue accounts and capital finance of local authorities) to Welsh local authorities during the transitional period (4th May 1995 to 31st March 1996). Provision is also made with regard to the application of the regulations made under Part IV (“the capital finance regulations”).

Article 2(1) disapplies section 44(6) of the 1989 Act (lender’s protection) to borrowing by existing authorities if section 51 of the 1994 Act (requiring the consent of the new authorities to certain contracts) is contravened. Article 2(2) and the Schedule modify, for the transitional period, the scope of new authorities' borrowing powers and the requirements for them to make minimum revenue provision. They also make other modifications of a consequential and transitional nature.

Article 3(1) disapplies, for new authorities in the transitional period, the provisions of the capital finance regulations relating to minimum revenue provision. Article 3(2) amends the capital finance regulations to ensure that all the new authorities are included in the list of bodies with whom approved investments can be made.