Local Government and Housing Act 1989

12 (1) If, at any time on or after 1st April 1990, a local authority set aside an amount as provision to meet credit liabilities (whether or not pursuant to a requirement to do so) then, subject to sub-paragraph (2) below, the authority’s credit ceiling shall at that time be reduced by an amount equal to the amount so set aside (and, by virtue of this paragraph, that ceiling may, accordingly, be a negative amount).

(2) This paragraph does not apply with respect to—

(a) an amount which, in relation to a credit arrangement, other than one excluded by regulations under paragraph 11 above, is applied or charged (as an amount of credit cover) as mentioned in paragraph (b) or paragraph (c) of subsection (3) of section 50 of this Act; or

(b) a 1980 Act receipt which, in accordance with paragraph 9 above, is brought into account to determine the authority’s initial credit ceiling; or

(c) so much of an amount set aside under section 63 of this Act as provision to meet credit liabilities as (in accordance with Part IV of this Schedule) is referable to notional interest on credit arrangements.

(3) For the purposes of this paragraph, an amount set aside under subsection (1) of section 63 of this Act in respect of any financial year shall be treated as set aside on the last day of that year.