The Local Authorities (Capital Finance) (Consequential, Transitional and Saving Provisions) Order 2004

Explanatory Note

(This note is not part of the Order)

This Order makes provision consequential on Part 1 of the Local Government Act 2003 (capital finance etc and accounts) and related provisions in that Act. Part 1 of that Act replaces the old capital finance system under Part IV of the Local Government and Housing Act 1989 (“the 1989 Act”) that is being repealed on 1st April 2004.

Article 3 provides for a saving of section 49 of the 1989 Act for the purposes of calculating the cost of a credit arrangement that came into being before 1st April 2004.

Article 4 amends the definition of item 2 in Part II of Schedule 4 to the 1989 Act, which concerns the debiting of certain capital expenditure to a local authority’s Housing Revenue Account.

Article 5 amends the provisions, for payment of a levy on certain disposals, in section 136 of the Leasehold Reform, Housing and Urban Development Act 1993.

Article 6 amends section 86 of the Government of Wales Act 1998 so that there is no longer a requirement to include information about credit approvals in the National Assembly for Wales’s statement of proposed expenditure.

On and after 1st April 2004, parish and community councils and charter trustees will be subject to the capital finance provisions in Part 1 of, and Schedule 1 to, the Local Government Act 2003 that apply to them by virtue of section 19 of that Act. Article 7 revokes the provisions in the Charter Trustees Order 1974 and the Charter Trustees Regulations 1996 that applied the borrowing provisions in Schedule 13 to the Local Government Act 1972 to charter trustees. The Local Government and Housing Act 1989 (Commencement No. 5 and Transitional Provisions) Order 1990 commenced the repeals of Schedule 13 to the 1972 Act and a number of other capital finance provisions specified in Schedule 12 to the 1989 Act and commenced the amendments to section 2 of the Public Works Loans Act 1965 and section 2 of the Public Works Loans Act 1967 in Schedule 11 to the 1989 Act. Those repeals and amendments were subject to savings for bodies such as parish councils and community councils. Article 7 revokes those savings so that Schedule 13 and those other capital finance provisions no longer apply to parish councils or community councils.

Article 7 includes savings and transitional provisions for parish councils, community councils and charter trustees concerning approvals given under Schedule 13 to the Local Government Act 1972 before 1st April 2004 and mortgages and charges effected before 1st April 2004 and, for those councils, concerning capital receipts arising from the disposal of land.

Article 8 saves the capital finance provisions that apply to Passenger Transport Executives in the Passenger Transport Executives (Capital Finance) Order 1990 for the purposes of any financial year beginning before 1st April 2004.

Article 9 revokes the capital finance provisions in the Local Authorities (Companies) Order 1995 to the extent not already revoked. It also makes savings in relation to financial years beginning before 1st April 2004.

Article 10 saves capital finance provisions that apply to public airport companies in the Public Airport Companies (Capital Finance) Order 1996 for the purposes of any financial year beginning before 1st April 2004.

Article 11 saves regulation 16 of the Local Authorities (Capital Finance) Regulations 1997 for the purposes of any definitions of “private finance transaction”, in or under any enactment, that are defined by reference to regulation 16.

Article 12 amends regulation 5 of the Building (Local Authority Charges) Regulations 1998 so that it refers to “proper practices” within the meaning of section 21 of the Local Government Act 2003 instead of “proper accounting practices” as defined in the 1989 Act.

Article 13 revokes the Metropolitan Police (Capital Finance) Order 2000, which modified Schedule 3 to the 1989 Act (provisions supplementing Part IV) and amended the Local Authorities (Capital Finance) Regulations 1997.

A full regulatory impact assessment has not been produced for this instrument, as it has no impact on the costs of businesses, charities or voluntary bodies.