The Local Authorities (Capital Finance) (Amendment) Regulations 1998

Meaning of private finance transaction

4.  For regulation 16 substitute the following regulation–

“Meaning of private finance transaction

16.— (1) In this regulation–

• “asset” means–

  (a)

  any tangible asset, including (in particular) any land, house or other building, plant, machinery, vehicle, vessel, apparatus or equipment; or

  (b)

  any computer software; “relevant asset” means any asset apart from housing land; and

• “works” means any works consisting of the construction, enhancement, replacement or installation of an asset, apart from works consisting of the construction of a house or other dwelling on housing land.

(2) For the purposes of this Part, a transaction is a private finance transaction if–

(a) the consideration received by the authority under the transaction includes–

(i) the provision or making available of a relevant asset or the carrying out of works for the purposes of, or in connection with, the discharge of a function of the authority; and

(ii) the provision of services for the purposes of, or in connection with, the discharge of the same function;

(b) the authority do not give to any person any undertaking or guarantee in respect of any obligations or liabilities of the person with whom they enter into the transaction (whether incurred under the transaction or otherwise);

(c) the consideration given by the authority under the transaction includes the payment of fees by instalments at annual or more frequent intervals;

(d) the fees are determined in accordance with provisions relating to–

(i) standards attained in the performance of the services; or

(ii) the extent, rate or intensity of use of the relevant asset, or, as the case may be, of the asset which is constructed, enhanced, replaced or installed under the transaction;

(e) the first instalment of fees falls to be paid after the services have started to be provided;

(f) the terms agreed for the transaction do not provide for an instalment of fees to be determined by reference to any factors other than–

(i) a specified sum or specified rate of payment;

(ii) a measure of the amount of work carried out under the transaction; and

(iii) the matters provided for in the provisions mentioned in sub-paragraph (d); and

(g) the terms agreed for the transaction do not provide for the specified sum or specified rate of payment to be increased by reference to any factors other than–

(i) a rise in costs attributable to a rise in the price of gas, electricity or fuel; and

(ii) the figure in Table 2.1 of Economic Trends(1) published by the Office for National Statistics as the most recent percentage change, quarter on corresponding quarter of previous year, of the implied gross domestic product deflator at market prices.”.

(1)

Available from the Office for National Statistics or from The Stationery Office.