PART 5Discharge of liabilities

Interest on amount of instalments16

1

An authority shall pay interest to another authority in respect of any amount which—

a

has become payable to that authority in accordance with the schedule of instalments, but

b

has not been so paid.

2

Interest shall be payable on the amount outstanding for every day of the period beginning with the day on which the amount was due to be paid and ending on the day before the day on which it is paid.

3

Interest shall be calculated at the rate which is 2 per cent above the highest base rate quoted by any of the reference banks at anytime in the period for which that interest is payable.

4

The interest shall be paid at the same time as the amount outstanding is paid.

5

For the purposes of paragraph (3), the reference banks are the seven largest persons for the time being who—

a

have permission under Part 4 of the Financial Services and Markets Act 2000 F1 to accept deposits;

b

are incorporated in the United Kingdom and carrying on there a regulated activity of accepting deposits; and

c

quote a base rate in sterling.

6

For the purposes of paragraph (5), the size of a person is to be determined by reference to the total consolidated gross assets of that person denominated in sterling, as shown in the audited end-year accounts last published before the period for which interest is payable begins.

7

In this regulation the “consolidated gross assets” of a person is a reference to the gross assets of that person together with any subsidiary (within the meaning of section 1159 of the Companies Act 2006 F2).

8

Paragraph (5) must be read with—

a

section 22 of the Financial Services and Markets Act 2000;

b

any relevant order under that section; and

c

Schedule 2 to that Act.