The Greater London Council (Transfer of Land and Housing Accommodation) Order 1981

Article 22

SCHEDULE 3 PAYMENTS IN RESPECT OF NET COST OF, AND NET INCOME FROM, TRANSFERRED PROPERTY

1.  Payments in respect of the net cost of, and net income from the transferred property shall be made in accordance with the following provisions of this Schedule.

2.—(1) Where in any financial year commencing with 1981/82 there is a difference between the outgoings in respect of the transferred property and the rents (including subsidies) receivable therefore, then:—

(a) if the outgoings exceed the rents (including subsidies) receivable, the difference shall be paid by the Council; and

(b) in the converse case, where the transferee authority is a district council, the difference shall be paid by the transferee authority.

(2) In this paragraph—

(a) subject to any adjustment under paragraph 3 or 5,

“the outgoings” means the sum of:—

(i)

the loan charges incurred in respect of the transferred property for 1980/81; and

(ii)

the costs of managing and maintaining the transferred property for 1980/81, as determined by the Council

; and

“rents” means all the income from the transferred property (including rent rebate subsidy) for 1980/81, as determined by Council; and

(b) “subsidies” means all grants or subsidies payable in respect of the transferred property, other than rent rebate subsidy.

(3) Where the relevant date falls after 1st April 1981, any payment which falls to be made for 1981/82 shall be abated proportionately.

(4) For 1981/82, any factors which are agreed between the Council and a representative body to be peculiar to 1981/82, and attributable to events occurring immediately before the relevant date, shall be taken into account for that year.

(5) Where any building which is in the course of construction on the transferred property at the relevant date becomes available for letting at a later date, the outgoings and the rents in respect thereof shall be appropriately adjusted in such manner as the Council shall determine.

3.  The costs referred to in paragraph 2 shall be adjusted in accordance with—

(a) in the case of a London borough council:—

(i) such office and other accommodation as the transferee authority may require for the purpose of managing and maintaining the transferred property, in addition to any such accommodation which is included in the transferred property, and

(ii) the costs incurred by the authority in pursuance of Schedule 2; and

(b) in any case, in respect of 1981/82, all special costs reasonably incurred by the transferee authority within six months of the relevant date in consequence of this order, as agreed with the Council.

4.  In calculating the subsidies referred to in paragraph 2, no account shall be taken of any reduction resulting from the demolition or disposal by a transferee authority of any houses on the transferred property occurring after the relevant date.

5.—(1) In the case of a London borough council:—

(a) the liabilities of the transferee authority under article 19 for the year in question shall be substituted for the loan charges referred to in paragraph 2;

(b) the costs referred to in paragraph 2 shall be taken to be increased in each year by an amount to be determined by the Council, which shall not be less than the sum per dwelling stated by the Secretary of State to have been used for the purpose of determining the reckonable expenditure of the authority under section 99 of the Housing Act 1980;

(c) the rents referred to in paragraph 2 shall be taken to be increased in each year by an amount to be determined by the Council, which shall not exceed the sum per dwelling stated by the Secretary of State to have been used in determining the local contribution differential of the authority under section 100 of the Housing Act 1980.

(2) In the case of a London borough council which is a transferee authority within the meaning of the Greater London Council (Transfer of Land and Housing Accommodation) Order 1980, it shall be assumed, in determining what payments fall to be made under this Schedule, that the property transferred by that order had instead been transferred by this order, but not so that any payment falls to be made more than once in respect of the same property.

(3) In the case of a district council, the liabilities of the authority under article 19(1)(b) for the year in question shall be added to the loan charges referred to in paragraph 2.

(4) Before determining the amount of any increase under this paragraph, the Council shall consult the transferee authorities concerned or a representative body.

6.—(1) Where a transferee authority disposes of or appropriates any transferred property, any payment falling to be made in respect of that property under paragraph 2 for any financial year commencing after the disposal or appropriation takes place shall be adjusted in accordance with the following provisions of this paragraph.

(2) For the purposes of this paragraph the Council shall determine what payment would fall to be made under this Schedule if the property so disposed of or appropriated were the only transferred property (in this paragraph referred to as “the part payment”).

(3) Where the part payment would fall to be made by the Council, the property is referred to in this paragraph as being in deficit, and where it would fall to be made by the transferee authority, it is referred to as being in surplus.

(4) Where the consideration for the disposal, or the value at which the appropriation is made, expressed in money, is sufficient to discharge the outstanding loan debt attributable to the property, and the property is in deficit, then:—

(a) if the payment falls to be made by the Council, it shall be reduced by the amount of the part payment;

(b) if the payment falls to be made by the transferee authority, it shall be increased by the same amount.

(5) Where such consideration or value is insufficient to discharge the outstanding loan debt attributable to the property, the property is in deficit and the part payment exceeds the residual loan charges, then:—

(a) if the payment falls to be made by the Council, it shall be reduced by the excess of the part payment over the residual loan charges; and

(b) if the payment falls to be made by the transferee authority, it shall be increased by the same amount.

(6) In this paragraph “residual loan charges” means such part of the loan charges payable in respect of the property as the Council shall determine, being the amount which would remain to be met after applying in respect of the property either any annual mortgage payments to be made to the transferee authority or any capital sum received by that authority, and after deducting any grant or subsidy continuing to be payable in respect of the property.

7.  The transferee authority shall furnish the Council with sufficient details of the disposal or appropriation of any transferred property to enable the adjustments required by paragraph 6 to be made.

8.—(1) Not later than 31st March 1985, the Council shall review the terms set out in this Schedule for the purpose of considering the need for payments to be, or continue to be, made by the Council; and where it is agreed in consequence of such review that payments should be made having regard to the financial needs of any transferee authority, then the Council shall make payments to such authority for such a period, and on such terms and conditions, as may be agreed.

(2) In the case of a district council, no payments shall be made under this Schedule in respect of any financial year commencing with 1985/86 save in pursuance of an agreement under sub-paragraph (1).

(3) In the case of a London borough:—

(a) the Council or a transferee authority may at any time give notice requiring the terms set out in this Schedule to be reviewed, and specifying the circumstances which in the opinion of the notifying authority call for the review, and thereupon the Council shall review the said terms;

(b) in the event of a review under (a) above, such payments shall be made as may be agreed or in default of agreement determined by the Secretary of State;

(c) not earlier than five years after the date specified in sub-paragraph (1), and every five years thereafter, the Council may, and if so requested by a transferee authority shall, carry out a further review of the terms set out in this Schedule; and the provisions of sub-paragraph (1) shall apply to any such further review.

(4) Any review to which this paragraph applies shall be carried out by the Council in consultation with the transferee authorities concerned or with a representative body.

9.  In this Schedule “ representative body” means a body appearing to the Council to represent transferee authorities.