(1)A local authority who determine, or are deemed to have determined, or anticipate that they will be required to determine, a rate under section 5 (4)(b) of the [1966 c. 51.] Local Government (Scotland) Act 1966 shall neither wholly nor partially offset the difference between that rate and the rate determined by them under section 108 of the 1973 Act with sums advanced from their loans fund:
Provided that such offsetting may nevertheless be permitted by the Secretary of State in any case on such terms and conditions as he considers appropriate.
(2)If the Secretary of State is of the opinion that subsection (1) above, or any term or condition imposed under the proviso thereto, has been contravened the local authority shall, on such opinion being intimated to them, reimburse their loans fund forthwith or within such time as the Secretary of State may allow.
(3)In subsections (1) and (2) above, "loans fund" means the loans fund established under Schedule 3 to the [1975 c. 30.] Local Government (Scotland) Act 1975.