Local Government Act 2003 (c. 26)

Part 1 E+W Capital finance etc and accounts

Modifications etc. (not altering text)

C1 Meaning of “local authority” in Pt. 1 modified (5.3.2008) by Cheshire (Structural Changes) Order 2008 (S.I. 2008/634), arts. 1, 9(9)(c)

C2 Meaning of “local authority” in Pt. 1 modified (28.3.2008) by Bedfordshire (Structural Changes) Order 2008 (S.I. 2008/907), arts. 1, 20(7)(c)

C3 Pt. 1 applied (15.1.2014) by Humber Bridge Act 2013 (c. vi), ss. 1(1), 8(4)

C4 Pt. 1 applied in part (with modifications) by Police Reform and Social Responsibility Act 2011 (c. 13), Sch. 2 para. 7A(4)(7)(8), Sch. 4 para. 4A(4)(5) (as inserted (13.5.2014) by Anti-social Behaviour, Crime and Policing Act 2014 (c. 12), ss. 141(1)(2), 185(1))

C5 Pt. 1 modified (25.5.2018) by The East Suffolk (Local Government Changes) Order 2018 (S.I. 2018/640), arts. 1, 17(2)(c)

C6 Pt. 1 modified (25.5.2018) by The West Suffolk (Local Government Changes) Order 2018 (S.I. 2018/639), arts. 1, 17(2)(c)

C7 Pt. 1 modified (26.5.2018) by The Somerset West and Taunton (Local Government Changes) Order 2018 (S.I. 2018/649), arts. 1, 17(2)(c)

C8 Pt. 1 modified (26.5.2018) by The Bournemouth, Dorset and Poole (Structural Changes) Order 2018 (S.I. 2018/648), arts. 1, 21(2)(c), 36(2)(c)

C9 Pt. 1 modified (23.5.2019) by The Buckinghamshire (Structural Changes) Order 2019 (S.I. 2019/957), arts. 1, 15(2)

C10 Pt. 1 modified (14.2.2020) by The Northamptonshire (Structural Changes) Order 2020 (S.I. 2020/156), arts. 1, 17(2)(c)

C11 Pt. 1 applied (18.3.2022) by The Cumbria (Structural Changes) Order 2022 (S.I. 2022/331), arts. 1(1), 18(2)(c)

Chapter 1 E+W Capital finance etc

[F1 Risk management: England E+W

Textual Amendments

F1 Ss. 12A-12D and cross-heading inserted (31.1.2024) by Levelling-up and Regeneration Act 2023 (c. 55), ss. 78(2), 255(2)(p) (with s. 247); S.I. 2024/92, reg. 2(a)

12B Risk thresholds E+W

(1) For the purposes of section 12A(2)(a), a risk threshold is breached by a local authority in England if (and when) a capital risk metric for the local authority breaches the specified threshold for that metric.

(2) Each of the following is a “capital risk metric”—

(a) the total of a local authority’s debt (including credit arrangements) as compared to the financial resources at the disposal of the authority;

(b) the proportion of the total of a local authority’s capital assets which is investments made, or held, wholly or mainly in order to generate financial return;

(c) the proportion of the total of a local authority’s debt (including credit arrangements) in relation to which the counter-party is not central government or a local authority;

(d) the amount of minimum revenue provision charged by a local authority to a revenue account for a financial year;

(e) any other metric specified by regulations made by the Secretary of State.

(3) The Secretary of State may, by regulations, make further provision—

(a) specifying whether the specified threshold for a particular metric is breached by a failure to reach that threshold or by that threshold being exceeded;

(b) about how the metrics specified in, or under, subsection (2) are to be calculated for the purpose of determining whether the specified threshold for that metric has been breached.

(4) Before making regulations under subsection (2)(e), the Secretary of State must consult all local authorities in England.

(5) In this section—

• “capital asset” has the meaning given by section 9;

• “minimum revenue provision” has the meaning given by regulation 27 of the Local Authorities (Capital Finance and Accounting)(England) Regulations 2003 (S.I. 2003/3146);

• “specified” means specified, or determined in a manner specified, in regulations made by the Secretary of State.

(6) Regulations may require a specified threshold to be determined having regard to guidance issued under section 21(1A) (accounting practices).]