The Local Government Changes for England (Collection Fund Surpluses and Deficits) Regulations 1995

Explanatory Note

(This note is not part of the Regulations)

Under Part II of the Local Government Act 1992, where recommendations for changes to local government in England are made by the Local Government Commission, the Secretary of State may make an order (a “reorganisation order”). The Local Government Changes for England (Finance) Regulations 1994 make transitional provisions for local authorities subject to a reorganisation order.

These Regulations make consequential and transitional provisions for the application of the Local Authorities (Funds) (England) Regulations 1992 in relation to authorities subject to reorganisation orders, other than those to which the Local Government Changes for England (Collection Fund Surpluses and Deficits) Regulations 1994 apply.

The 1992 Funds Regulations make provision in relation to the liabilities of a billing authority to pay amounts in respect of precepts, and of a billing authority and its major precepting authorities in relation to estimated surpluses or deficits in a billing authority’s collection fund. These Regulations are modified so that payments which, but for the reorganisation order, would fall to be made by or to a billing authority which is abolished are to be made by or to the designated authority (regulation 3).

Where a billing authority is an abolished or relinquishing authority (defined in regulation 2(1) and (2)) these Regulations require it to apportion its share of the estimated surplus or deficit in its collection fund for the year immediately before reorganisation (“the estimated balance”) among its successors, or between itself and its acquiring authorities (regulation 4). When the audited balance on the collection fund for that year (“the final balance”) is known the billing authority, or, where that authority is abolished, the designated authority, is required to calculate the difference between each successor, relinquishing, acquiring or major precepting authority’s share of the estimated balance and its share of the final balance (regulation 5).

Where a major precepting authority is an abolished or relinquishing authority, the relevant billing authority is required by these Regulations to apportion the major precepting authority’s share of the estimated balance among its successors, or between that authority and its acquiring authorities (regulation 6). Regulation 7 provides for the calculation of the difference between the share in the estimated balance of each such successor or acquiring authority, the billing authority and, where the major precepting authority is a relinquishing authority, that authority, and the share of each such authority in the final balance.

These Regulations provide for payments to be made in respect of an authority’s share in the estimated balance, and the amount of the difference between this and its share in the final balance. These Regulations also require a billing authority to make transfers between its collection and general funds in respect of its share in the estimated balance and the amount of the difference between this and its share in the final balance. These transfers and payments are to be made in the year following calculation or notification of the amounts, with an exception for late calculation or notification (regulation 8).

These Regulations modify sections 33, 43 and 44 of the Local Government Finance Act 1992 so that the payments and transfers required by these Regulations in relation to estimated and final balances fall to be treated by a billing or major precepting authority within their calculations of their budget requirement and council tax in the same way as transfers required under sections 97(3) and (4) of the 1988 Act and payments required under the 1992 Funds Regulations (regulation 11).

These Regulations also provide for certain payments between a designated authority in relation to an abolished billing authority and other successor authorities (regulation 9) and between a relinquishing authority and its acquiring authorities in respect of balances in the collection fund in connection with certain community charge items (regulation 10).