6For Part II of Schedule 1 there shall be substituted the following Part—
“PART IIThe Resources Element
1No payment in respect of the resources element shall be made to a local authority for any year unless in that year the product of a rate of one penny in the pound for the authority's area is less than the standard penny rate product for the area.
2Subject to any provision made by virtue of section 4(5) of this Act and to paragraph 3 below, the amount of the resources element payable to a local authority for any year shall be the product of—
(a)the number of pence in the pound of the regional, general or district rate, as the case may be or, where the Secretary of State is of the opinion that the local authority have fixed an unnecessarily high rate, such lesser number of pence in the pound of that rate as the Secretary of State considers appropriate, and
(b)the difference between the rate products mentioned in paragraph 1 above.
3(1)If, after the amount of the resources element payable to a local authority for any year has been determined under paragraph 2 above—
(a)the rateable values of lands and heritages in the authority's area are reduced with effect from a date on or before that which is relevant for determining the product of a rate of one penny in the pound for the authority's area for that year ; and
(b)the effect of that reduction is to produce a reduction in the said product which is of such a magnitude that, expressed as a percentage of the initially ascertained figure, it exceeds such percentage as may be specified for the purposes of this paragraph in regulations made by the Secretary of State; and
(c)the authority by notice in writing request the Secretary of State to give a direction under this paragraph ;
the Secretary of State shall direct that the amount of the resources element payable to the authority for that year shall be recalculated in accordance with the following provisions of this paragraph and a further payment on account of that element shall be made to the local authority accordingly.
(2)Where sub-paragraph (1) above applies—
(a)the product of a rate of one penny in the pound for the local authority's area for the year concerned shall be recalculated by treating the initially ascertained figure as reduced by the amount of the excess referred to in sub-paragraph (1)(b) above;
(b)subject to any provision made by virtue of section 4(5) of this Act, paragraph 2 above shall have effect accordingly for the purpose of determining the amount which, on the basis of that recalculation, would have been payable to the authority for that year.
(3)The further payment referred to in sub-paragraph (1) above shall be an amount equal to the difference between the amount previously paid to the authority for the year concerned on account of the resources element and the amount determined as mentioned in sub-paragraph (2)(b) above.
(4)In this paragraph " the initially ascertained figure ", in relation to any year, means the product of a rate of one penny in the pound ascertained for the purposes of paragraph 2 above.
(5)The provisions of this paragraph shall have effect notwithstanding that the actual aggregate amount of the resources element for the year concerned may have been specified in an order under section 4(1) of this Act, and if any amount has been so specified it shall be treated as having been increased to such amount as may be necessary to provide for any further payment made to a local authority under this paragraph.”