(This note does not form part of the Order)
Part IV of the Local Government and Housing Act 1989 establishes a framework of capital finance controls for local authorities in relation to the financial years starting on or after 1st April 1990. Section 39 enables these controls to be extended and adapted so as to take account of the capital finance transactions of bodies under local authority control. Among these bodies are the Passenger Transport Executives each of which is responsible under the Transport Act 1968 (c. 73) to the Passenger Transport Authority (“PTA”) for its area.
This Order, which comes into force on 1st April 1990, sets out the effects for PTAs of the capital financing transactions of their Executives.
Article 2 describes which transactions affect the PTAs and how these effects are to be measured. Article 3 sets out the effect for a PTA of receipts and benefits from the disposal by an Executive of capital assets and of increases in the course of a financial year in the liabilities of the Executive (other than those owed to the PTA). Article 4 sets out the effect for the PTA of decreases in the course of a financial year of such liabilities.
Article 5 requires the Executives to make provision for the repayment of their long-term liabilities other than those to the Authority. This provision can be either applied for the repayment of debts or held in such approved investments, as may be specified for local authorities.
Article 6 excludes certain transactions between a PTA and its Executive from the capital finance provisions of Part IV of the Act.
Article 7 allows the Authority to fix a limit on the increases which the Executive may make in its capital liabilities not owed to the Authority.