3.—(1) The Secretary of State may pay grants to authorities in respect of expenditure, the classes or descriptions of which are specified in the Schedule to these Regulations, incurred or to be incurred by them in making provision the purpose (or main purpose) of which is to promote and facilitate the education of persons to whom these Regulations apply, which expenditure is, subject to paragraph (4), for the time being approved by the Secretary of State for the purposes of these Regulations.
(2) Except as provided by paragraph (3), the classes or descriptions of expenditure specified in the Schedule to these Regulations relate to provision in respect of such persons to whom these Regulations apply as are referred to in paragraphs (a), (b) and (c) of regulation 4: provided that, in respect of such persons as are referred to in paragraph (c) of that regulation, such expenditure is not eligible for grant under section 11 of the Local Government Act 1966(1).
(3) The classes or descriptions of expenditure specified in paragraphs 3 and 4 of that Schedule relate to provision in respect of such persons to whom these Regulations apply as are referred to in paragraphs (a) and (b) of regulation 4.
(4) Where any authority—
(a)have incurred expenditure other than that approved as provided in paragraph (1), no grant shall be payable in respect of such expenditure;
(b)have incurred expenditure which has been so approved but have done so in a way which appears to the Secretary of State to be inefficient or ineffective, he may, after consultation with the authority, by notice in writing to that authority—
(i)withdraw his approval in respect of any expenditure which he has so approved and which has not been incurred by them before the date of such notice; and
(ii)specify a period, reasonable in the circumstances, up to the end of which grant will be payable in respect of any expenditure incurred by them before the end of that period in consequence of contractual obligations arising before the date of such notice.