Local Government and Housing Act 1989

157 Commutation of, and interest on, periodic payments of grants etc

(1) In any case where, by virtue of any enactment, the Secretary of State has a power or duty to make to a local authority any annual or other periodic payments by way of contribution, grant or subsidy towards expenditure incurred or to be incurred by the local authority, the Secretary of State—

(a) may determine to commute any such payments which would otherwise fall due on or after 1st April 1990 either into a single payment or into such number of payments (being less than would otherwise be payable) as he considers appropriate; and

(b) may, if he thinks it appropriate, pay to the Public Works Loans Commissioners the whole or any part of any single or other payment determined under paragraph (a) above so as to reduce or extinguish such debt (whether then due or not) of the local authority to those Commissioners as the Secretary of State thinks fit.

(2) The amount required to reduce or extinguish a debt as mentioned in paragraph (b) of subsection (1) above shall be such as may be determined by the Public Works Loans Commissioners and where, by virtue of that paragraph, only part of a commuted payment is paid to those Commissioners, the balance shall be paid to the local authority concerned.

(3) Subsection (1) above applies whether the annual or other periodic payments began, or would otherwise begin, before, on or after the passing of this Act and applies notwithstanding anything in any enactment requiring the payments to be made over a period of twenty years or any other specified period.

(4) A single or other payment falling to be made by virtue of subsection (1) above is in this section referred to as a “commuted payment” and the calculation of the amount of any commuted payment shall be such as appears to the Secretary of State to be appropriate.

(5) In any case where the amount of any annual or other periodic payment such as is mentioned in subsection (1) above is, at the passing of this Act, calculated by reference to a rate of interest which varies from time to time, the Secretary of State may substitute a fixed rate of interest.

(6) In this section “local authority”, as respects England and Wales, means any of the following—

(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 Scilly;

(f) the Receiver for the Metropolitan Police District;

(g) a police authority constituted under section 2 of the [1964 c. 48.] Police Act 1964 or a combined police authority established by an amalgamation scheme under that Act;

(h) a joint authority established by Part IV of the [1985 c. 51.] Local Government Act 1985; and

(i) a residuary body established under Part VII of that Act;

and, as respects Scotland, means a regional, islands or district council or a joint board or joint committee within the meaning of section 235(1) of the [1973 c. 65.] Local Government (Scotland) Act 1973.

(7) If, after a commuted payment has been made to a local authority or to the Public Works Loans Commissioners, it appears to the Secretary of State that the payment was smaller or greater than it should have been (whether by virtue of a miscalculation, the occurrence of any event, the failure to comply with any condition or otherwise) the Secretary of State may, as the case may require,—

(a) make a further payment to the authority concerned or to those Commissioners; or

(b) require the repayment or payment to him by that authority of such sum as he may direct.

(8) Without prejudice to the operation of the preceding provisions of this section, with respect to—

(a) any contribution in respect of an expense incurred on or after 1st April 1990; and

(b) so much of any contribution in respect of an expense incurred before that date as has not been made before that date,

section 569 of the [1985 c. 68.] Housing Act 1985 (contribution by Secretary of State to certain expenses incurred by local housing authorities) shall be amended as follows—

(i) in subsection (2) (which relates to contributions as annual payments) for the words following “shall be” there shall be substituted the words “equal to the relevant percentage of the amount of the expense incurred”; and

(ii) subsection (5) (which relates to annual loan charges) shall cease to have effect.

(9) Without prejudice to the generality of section 230 of the [1972 c. 70.] Local Government Act [1973 c. 65.] 1972 or section 235(1) of the Local Government (Scotland) Act 1973 (local authorities' duty to make reports and returns to the Secretary of State), every local authority and the Inner London Education Authority shall furnish to the Secretary of State such information as he may by notice in writing reasonably require for the purposes of this section and, if the notice so specifies, any such information shall be certified and audited in such manner and supplied not later than such date and in such form as may be so specified.

(10) Nothing in this section applies in relation to any payments to which, under Part IV of Schedule 15 to the Housing Act 1985 (superseded contributions etc.: town development subsidy), provision already exists for the commutation of payments.