Local Government, Planning and Land Act 1980

PART VIII Capital Expenditure of Local Authorities Etc

71 Expenditure to which Part VIII applies

(1) This Part of this Act applies to prescribed expenditure of the following authorities—

(a) a county council;

(b) a district council;

(c) a London borough council;

(d) the Common Council of the City of London ;

(e) the Council of the Isles of Stilly ;

(f) a fire authority constituted by a combination scheme under section 6 of the [1947 c. 41.] Fire Services Act 1947;

(g) a joint planning board constituted for a National Park by an order under paragraph 1 of Schedule 17 to the [1972 c. 70.] Local Government Act 1972 ; and

(h) a special planning board constituted for a National Park by an order under paragraph 3 of that Schedule.

(2) Any reference to prescribed expenditure in this Part of this Act shall be construed in accordance with Schedule 12 to this Act.

72 Expenditure which authorities may make

(1) Subject to subsection (2) below, it shall be the duty of the appropriate Minister to specify in relation to any authority to whom this Part of this Act applies an amount of prescribed expenditure for each year.

(2) The Minister of Transport may specify an amount of prescribed expenditure in relation to any authority mentioned in section 71(1) above but it shall not be his duty to do so except in relation to a county council.

(3) Subject to subsection (5) below, an authority to whom this Part of this Act applies may make in any year payments in respect of prescribed expenditure equal to or less than the aggregate of the following: —

(a) the amount specified for the year under subsection (1) above; and

(b) an amount not exceeding 10 per cent, (or such other proportion as may be prescribed for the year) of the amount so specified ; and

(c) any amount of prescribed expenditure specified at any time, but not later than 1st November in the year to which the allocation relates except with the prior agreement of the authority concerned, for the year by the appropriate Minister in addition to the amount specified under subsection (1) above; and

(d) an amount for the year equal to the authority's net capital receipts or to such proportion of those receipts as may be prescribed; and

(e) an amount for the year equal to the authority's entitlement of profits of a trading undertaking owned by that authority individually or as a member of a joint committee of local authorities and such payments may be made, subject to section 73 below, for such purposes as the authority think fit.

(4) In subsection (3)(e) above trading undertakings include—

(i) any railway, light railway, tramway, road transport, water transport, canal, inland navigation, ferry, dock, harbour or pier undertaking;

(ii) any telephone undertaking ;

(iii) any aerodrome;

(iv) any market undertaking ;

(v) any undertaking for the provision of entertainments under section 145 of the [1972 c. 70.] Local Government Act 1972 or any local enactment;

(vi) any undertaking for the supply of district heating;

(vii) any civic catering undertaking ; or

(viii) any exhibition hall or complex.

(5) Nothing in subsection (3) above authorises an authority to make payments if to make them would fall outside the powers the authority have apart from that subsection.

(6) For the purpose of determining whether a payment was authorised under subsection (3) above the amount of the net capital receipts of the authority who made the payment shall be ascertained on 31st March in the year in which the payment was made.

(7) In this section " net capital receipts ", in relation to any year, means the receipts of an authority which by virtue of section 75(1) below are capital receipts for the purposes of this Part of this Act, as reduced by any payment in a previous year which was authorised by subsection (3)(d) above.

(8) If in any year (the relevant year) an authority make in respect of prescribed expenditure payments exceeding the aggregate of the amounts mentioned in subsections (3)(a), (c) and (d) above, the amount which would (apart from this subsection) be specified under subsection (1) above for the following year shall be reduced by the appropriate amount.

(9) Subject to subsection (10) below, the appropriate amount is an amount equal to the excess mentioned in subsection (8) above.

(10) Where, in the preceding year (that is, the year preceding the relevant year), the authority have not spent the whole of the amounts mentioned in subsection 3(a) and (c) above for the preceding year, the amount of the reduction is an amount equal to the excess mentioned in subsection (8) above minus whichever of the following is less, namely—

(a) the part not spent for the preceding year;

(b) the amount mentioned in subsection 3(b) above for the relevant year.

73 Projects of regional or national importance

(1) Where the appropriate Minister specifies an amount under section 72(1) above, he may further direct under this section that—

(a) a specified part of the aggregate of the amounts mentioned in section 72(3) above may be spent only on a specified project;

(b) no part of that aggregate may be spent on a specified project.

(2) A project may only be specified under subsection (1) above if the appropriate Minister—

(a) is of opinion that the project is of national or regional importance, or

(b) is of opinion that the project, though not itself of national or regional importance, is part of a project which is of such importance.

74 Withdrawal of specification

(1) Subject to subsection (2) below, a specification may at any time be withdrawn by the Minister who made it so far as it relates to payments which the authority have not made before it is withdrawn.

(2) A specification may not be withdrawn so far as it relates to a payment in satisfaction of any liability in respect of which an authority have entered into a binding contract.

75 Capital receipts

(1) Subject to the following provisions of this section and to any regulations under subsection (5) below, for the purposes of this Part of this Act an authority's capital receipts are equal—

(a) to any sums received by the authority before the commencement date in respect of the disposals and repayments mentioned in subsections (2) and (3) below, less the amount spent by the authority before that date out of any such sums (for whatever purpose); and

(b) to any sums received by the authority on or after the commencement date in respect of those disposals and repayments, without any deduction.

(2) The disposals are those of land (including buildings and Structures on land), vehicles, vessels, movable and immovable plant, machinery and apparatus.

(3) The repayments are those of grants and advances of a capital nature other than grants and advances to local authorities, or Passenger Transport Executives.

(4) Where—

(a) the authority dispose—

(i) of an interest in land which confers a right to occupy the land but is not a freehold interest, or,

(ii) of an interest in goods other than the property in them; or

(b) any such interest belonging to the authority comes to an end by any means,

there shall be included in the capital receipts of the authority a sum equal to the amount which under section 80 below the authority would have been taken to have paid for the acquisition of the interest if it had acquired it at the date when it disposed of it or when the interest came to an end.

(5) Regulations may provide—

(a) that the proportion mentioned in section 72(3)(d) above shall be different in so far as the sums received are in respect of the disposal of different classes of assets or of the repayment of different classes of grants or advances ;

(b) that sums received before a date specified in the regulations shall not be treated as received for the purposes of subsection (1) above ;

(c) that sums spent before a date specified in the regulations shall not be treated as spent for the purposes of subsection (1) above;

(d) that classes of assets shall be treated, or shall be treated to an extent specified in the regulations, as if they were mentioned in subsection (2) above in addition to or in substitution for those so mentioned;

(e) that classes of assets shall be treated, or shall be treated to an extent specified in the regulations, as if they were not mentioned in subsection (2) above ;

(f) that sums which are not capital receipts for the purposes of this Part of this Act by virtue of subsection (1) above shall be capital receipts for those purposes.

76 Specification of expenditure-supplementary

(1) It shall be the duty of the appropriate Minister to give an authority notice of the particulars of a specification under section 72 above in respect of any year before the beginning of the year in relation to which he makes the specification.

(2) So far as a specification relates to payments in respect of expenditure in England for the purpose of functions the responsibility for which is vested in the Minister of Transport, the specification shall be made by that Minister.

(3) In any other case a specification shall be made by the Secretary of State.

(4) References to the appropriate Minister in this section and section 72 above shall be construed in accordance with subsections (2) and (3) above.

77 Local authorities sharing expenditure

(1) This section has effect where by virtue of an agreement between two or more authorities to whom this Part of this Act applies any payment in respect of a specified amount of prescribed expenditure in respect of which a specification has been made under this Part of this Act as regards one of those authorities falls to be made by an authority other than the authority as regards whom the specification was made.

(2) Where an agreement such as is mentioned in subsection (1) above has been made, a specification made as regards one of the authorities who are parties to the agreement shall be treated as having been made as regards the authority by whom the payment falls to be made by virtue of the agreement and not as regards any other authority by whom it would fall to be made but for the agreement.

78 Power to give directions in relation to expenditure

(1) If the Secretary of State is of the opinion that an authority to whom this Part of this Act applies have failed or are likely to fail to fulfil the requirements of section 72 above in respect of any year, he may direct that after a date specified in the direction the authority—

(a) shall not make any payment in respect of prescribed expenditure if the amount of that payment, together with the amount of other payments of prescribed expenditure made in the same year, exceeds in aggregate the amounts which apply for that year under section 72(3)(a), (c) and (d) above as regards the authority ; and

(b) shall not enter into any contract for the carrying out of works of new construction, or undertake any such works the cost of which exceeds an amount specified in the direction ; and

(c) shall not enter into any contract under which they would incur liability to pay a sum or sums the amount of which exceeds an amount specified in the direction,

without the consent of the appropriate Minister.

(2) A direction under subsection (1) above may be varied or revoked by a further direction given by the Secretary of State.

(3) In this section " works of new construction " means building or engineering works involved in the construction or improvement of buildings and other structures or in the laying out, construction or improvement of highways and other land.

79 Payments etc. in contravention of direction under section 73 or 78

(1) Subject to subsection (2) below, it shall not be beyond the powers of an authority to make a payment or enter into a contract on the ground only that to do so would entail their making payments exceeding the aggregate mentioned in section 72(3) above.

(2) Subject to subsection (3) below, it shall be beyond the powers of an authority to make a payment or enter into a contract in contravention of a direction under section 73 or 78 above.

(3) A transaction between a person and an authority shall not be void by reason only that it was carried out in contravention of any such direction, and a person shall not be concerned to see or inquire whether such a direction has been given or complied with.

80 Valuation etc.

(1) Where an interest in or right over property is acquired then, for the purposes of this Part of this Act, the authority making the acquisition shall be taken to have paid an amount calculated as follows and shall not be taken to pay or to have paid any other amount on the acquisition; and any reference in this Part of this Act to a payment by an authority shall be construed as including a reference to a payment of an amount so calculated.

(2) A payment of an amount so calculated shall accordingly be treated as an item of account within the meaning of section 161 of the [1972 c. 70.] Local Government Act 1972 (powers of district auditor and the court).

(3) Where the acquisition is of an interest in land which consists of the fee simple absolute in possession, and the consideration for the acquisition is money alone, the amount is the consideration (whenever and however payable).

(4) Where the acquisition is—

(a) of a freehold interest in land and the consideration for the acquisition is not money alone, or

(b) of some other interest in or right over land and the interest or right confers a right to occupy the land,

the amount is the money consideration which would be obtained for the freehold interest in the land if the interest were sold on the open market by a willing seller at the time of the acquisition.

(5) This subsection applies where—

(a) the acquisition is of a leasehold interest in land ; and

(b) it is intended at the time of the acquisition that some person shall erect a building on the land for the authority.

(6) Where subsection (5) above applies, the authority shall be taken to make—

(a) on 31st March following the acquisition, a payment of an amount equal to the total value of any work carried out in respect of the building since the acquisition ; and

(b) on 31st March in each subsequent year, a payment of an amount equal to the difference between the total value of any work carried out by that date in respect of the building and the total value of any work carried out in respect of it by 31st March in the previous year.

(7) Any amount which by virtue of subsection (6) above an authority are to be taken to pay in respect of an acquisition is in addition to any amount calculated in accordance with subsection (4) above which they are to be taken to pay in respect of that acquisition.

(8) Where the acquisition is of an interest in or right over land and the interest or right does not confer a right to occupy the land, the amount is nil.

(9) Where the acquisition is of the property in goods under a contract of sale, the amount is the consideration (whenever and however payable).

(10) Where an acquisition is—

(a) of the property in goods under a contract other than one of sale, or

(b) of an interest in or right over goods other than the property in them,

the amount is the consideration which would be realised for the goods if they were sold (under a contract of sale) on the open market by a willing seller at the time of the acquisition.

(11) Where the acquisition is—

(a) by gift, or

(b) by deed and for no consideration other than the presumed consideration imported by the deed,

the amount is nil.

(12) Where the acquisition is of a right or interest not exceeding one year in duration, the amount is nil; but if such a right or interest is extended so as to exceed one year in duration, or if an authority acquire a right or interest to commence on the expiry of another and the two together exceed one year in duration, the authority shall be taken to acquire (on the date the extension, or the subsequent right or interest, is acquired) a right or interest exceeding one year in duration.

(13) Where by virtue of this section the amount is other than nil, and the acquisition is made in pursuance of an option to acquire, the amount also includes any consideration for the option (whenever payable).

(14) In subsection (4) above references to a freehold interest in land are to the fee simple absolute in possession (subject to any existing rights other than rights under a mortgage or charge to secure the payment of money).

(15) In subsections (9) and (10) above " property " (in relation to goods) means the general property in them and not merely a special property.

(16) For the purposes of this Part of this Act, the right to use any property is to be treated as an interest in the property.

(17) For the purposes of this Part of this Act, an interest in or right over property is acquired when an authority become entitled under the contract concerned to the immediate or future transfer of the interest or exercise of the right or to the immediate or future use of the property.

81 Expenditure of Greater London Council and London Transport Executive

Schedule 13 to this Act shall have effect.

82 Other Passenger Transport Executives and their subsidiaries

(1) For the purposes of this Part of this Act—

(a) any payment, acquisition or disposal by a Passenger Transport Executive whose area is either the whole or part of one county shall be treated as having been made by the county council;

(b) any receipt, contract or liability of an Executive shall be treated as a receipt, contract or liability of that council;

(c) any termination of an interest of an Executive shall be treated as the termination of an interest of that council; and

(d) any repayment to an Executive shall be treated as a repayment to that council.

(2) Subject to subsection (3) below, for the purposes of this Part of this Act

(a) any payment, acquisition or disposal by a Passenger Transport Executive established by an order under section 9 of the [1968 c. 73.] Transport Act 1968 shall be treated as having been made by all the county councils any part of whose area is within the Executive's area ;

(b) any receipt, contract or liability of such an Executive shall be treated as a receipt, contract or liability of all those councils ; and

(c) any termination of an interest of such an Executive shall be treated as the termination of an interest of all those councils; and

(d) any repayment to such an Executive shall be treated as a repayment to all those councils.

(3) Subsection (2) above shall have effect in relation to a Passenger Transport Executive and to the county councils any part of whose area is within the Executive's areas subject to and in accordance with the provisions of the order establishing the Executive.

(4) Any reference to a Passenger Transport Executive in subsections (1) to (3) above includes a reference to a company which is a wholly-owned subsidiary of such an Executive, as defined in section 159 (1) of the [1968 c. 73.] Transport Act 1968.

(5) References to an authority in this Part of this Act shall be construed in accordance with this section.

83 Submission to Passenger Transport Authority of proposals to acquire certain interests in land or goods

(1) Any proposal by a Passenger Transport Executive or any subsidiary of such an Executive to acquire—

(a) an interest in or right over land, other than a freehold interest, where the interest or right confers a right to occupy the land ; or

(b) an interest in or right over goods other than the property in them,

shall be treated as being a proposal involving an outlay on capital account for the purposes of section 15(1)(c) of the Transport Act 1968 (proposals for expenditure involving substantial outlay on capital account to be submitted by Executive for approval of Passenger Transport Authority.)

(2) In subsection (1) above "freehold interest" has the meaning assigned to it by subsection (14) of section 80 above and " property " has the meaning assigned to it by subsection (15) of that section.

84 Regulations under Part VIII

(1) Any power to make regulations under this Part of this Act (including Schedule 12 to this Act) shall be exercisable by statutory instrument.

(2) A statutory instrument containing any such regulations shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(3) Any such regulations may make different provision in relation to England and to Wales.

(4) Subject to subsection (5) below, any such regulations shall be made by the Secretary of State.

(5) So far as any such regulations relate to expenditure by any body in England for the purpose of functions the responsibility for which is vested in the Minister of Transport, they shall be made by the Secretary of State and that Minister.

(6) In this Part of this Act" prescribed " (except in the phrase " prescribed expenditure") means prescribed by regulations.

85 Part VIII-supplementary

(1) This Part of this Act shall come into force on such day as the Secretary of State and the Minister of Transport may by order made by statutory instrument appoint and different days may be so appointed for different provisions and for different purposes; and any reference in any provision of this Part of this Act to the commencement date is a reference to the day appointed under this section for the coming into operation of that provision or, if different days are so appointed for different purposes of that provision, the day appointed for the purpose in question.

(2) In this Part of this Act " year " means a period of 12 months beginning with 1st April.

(3) This Part of this Act extends to England and Wales only.