Subject to subsections (3) and (4) of this section, the Minister may with the approval of the Treasury make grants upon such terms and conditions as the Minister thinks fit to any person towards expenditure appearing to the Minister to be of a capital nature incurred or to be incurred by that person for the purpose of the provision, improvement or development of facilities for public passenger transport in Great Britain.

Subject to subsections (3) and (4) of this section, any local authority, or any two or more local authorities acting jointly, may make payments, upon such terms and conditions as they think fit, to any other person towards expenditure appearing to the authority or authorities in question to be of a capital nature incurred or to be incurred by that other person for the purpose of the provision, improvement or development of any facilities for public passenger transport if it appears to the authority or each of the authorities in question that those facilities are or will be of benefit to the area of that authority.

Where a relevant local authority proposes to make payments under subsection (2) of this section in respect of any facilities, that authority may enter into an agreement with F15the F2Strategic Rail Authority under which the Authority undertakes to exercise any of its franchising functionsF15a national authority under which the national authority undertakes to exercise any of its functions in relation to railways or railway services , to refrain from exercising such functions, or to exercise such functions in a particular manner, in relation to the use of the facilities in question.

In subsection (2A) of this section, the following expressions have the following meanings respectively, that is to say—

• F3. . .

• F16“franchising functions”, in relation to the F4Strategic Rail Authority, has the same meaning as it has in relation to F4it in section 54 of the Railways Act 1993;

• F17“national authority” means the Secretary of State, the Scottish Ministers or the National Assembly for Wales;

• “relevant local authority” means—

  1. a

     a non-metropolitan county or district council in England or in Wales;

  2. b

     a London borough council or the Common Council of the City of London; or

  3. c

     a F5council constituted under section 2 of the Local Government etc. (Scotland) Act 1994 in Scotland;

and any reference to a relevant local authority shall be taken to include a reference to any two or more such authorities acting jointly.

No grant under subsection (1) of this section and no payment under subsection (2) thereof shall be made for the purposes of the provision, improvement or development of an airfield, a harbour, or (except when used or to be used for the purposes of a ferry service) a dock, pier or jetty.

Nothing in subsection (3) of this section precludes the making of grants under subsection (1) or payments under subsection (2) thereof for the purposes of the provision, improvement or development of facilities for or in connection with public passenger transport by land to or from an airfield, harbour, dock, pier or jetty.

Where a person has used or proposes to use an asset of his for the purpose of the provision, improvement or development of facilities for public passenger transport, the Minister or, as the case may be, the local authority or local authorities in question may for the purposes of this section treat as expenditure of a capital nature incurred or to be incurred by that person for that purpose such amount not exceeding the capital value of that asset as the Minister or, as the case may be, the local authority or authorities in question may determine to be appropriate.