The Local Authorities (Capital Finance and Accounting) (Wales) Regulations 2003
| Jurisdiction | UK Non-devolved |
| Citation | SI 2003/3239 |
2003 No. 3239 (W.319)
LOCAL AUTHORITIES, WALES
The Local Authorities (Capital Finance and Accounting) (Wales) Regulations 2003
Made 9th December 2003
The National Assembly for Wales, in exercise of the powers conferred upon it by sections 3(5) to (7), 7(2)(b) and (3)(c), 8(3), 9(3), 10, 11, 15(1)(b), 16(2), 21(1) and (2), 23(2), 24, 123(2) and 124 of, and paragraph 4 of Schedule 1 to, the Local Government Act 20031, hereby makes the following Regulations:
Name, commencement, application and interpretation
1.—(1) These Regulations are called the Local Authorities (Capital Finance and Accounting) (Wales) Regulations 2003 and shall come into force for the purposes of regulations 1 and 2 on 31st December 2003 and for all other purposes on 1st April 2004.
(2) These Regulations apply only in relation to local authorities in Wales.
(3) In these Regulations any reference to a Part, section or Schedule is a reference to a Part or section of, or Schedule to, the Local Government Act 2003.
(4) In these Regulations—
“the 1997 Regulations” means the Local Authorities (Capital Finance) Regulations 19972
“dwelling” means any building or part of a building which is occupied as a dwelling, or is a hostel providing accommodation for persons who, for the purposes of Part 7 of the Housing Act 1996 (Homelessness)3are homeless, or persons who have a special need for accommodation arising from physical or mental disability, age, infirmity or other special social disability or disadvantage;
“housing land” means any land, house or other building in relation to which the local authority is, or has been, subject to the duty under section 74 of the Local Government and Housing Act 1989 (Duty to keep Housing Revenue Account)4;
“local authority” has the meaning given to it in section 23 of the Local Government Act 2003 in so far as it relates to Wales unless otherwise stated in these Regulations; and
“qualifying disposal” means a disposal of an interest in housing land which is a qualifying disposal for the purposes of section 135 or 136 of the Leasehold Reform, Housing and Urban Development Act 1993 (Disposals of dwelling-houses by local authorities)5.
PART 1
BORROWING
Code of practice
2. In complying with their duties under section 3(1) (duty to determine affordable borrowing limit), a local authority must have regard to the Prudential Code for Capital Finance in Local Authorities issued by the Chartered Institute of Public Finance and Accountancy6as may be amended from time to time.
PART 2
CREDIT ARRANGEMENTS
TRANSACTIONS WHICH ARE NOT CREDIT ARRANGEMENTS
Liabilities that do not arise from capital expenditure
3.—(1) Subject to paragraph (2) liabilities of a local authority that do not arise from the incurring by the authority of capital expenditure are liabilities specified for the purposes of section 7(3)(c) (Exclusion of certain liabilities from definition of “qualifying liabilities”).
(2) Paragraph (1) does not apply where proper practices in accordance with regulation 25 require the recognition of a fixed asset.
Retirement benefits
4.—(1) Liabilities for retirement benefits as represented by an appropriation to a pension reserve in accordance with proper practices in accordance with regulation 25 are liabilities specified for the purposes of section 7(3)(c).
(2) For the purposes of paragraph (1) and regulation 25, “retirement benefits” means benefits payable pursuant to—
(a)
(a) the Local Government Pension Scheme Regulations 19977;
(b)
(b) the Firemen’s Pension Scheme Order 19928;
(c)
(c) the Police Pensions Regulations 19879;
(d)
(e)
(e) the Teachers (Compensation for Redundancy and Premature Retirement) Regulations 199711; and
(f)
(f) any other regulations made under section 24 of the Superannuation Act 1972 (Compensation for loss of office etc.)12.
CALCULATION OF COST OF CREDIT ARRANGEMENTS AND OTHER CONTROLS
Calculation of cost of credit arrangements
5. For the purposes of section 8(2) (Entry into a credit arrangement or variation to be treated as the borrowing of an amount equal to the cost of the arrangement or variation) the cost of a credit arrangement or variation of a credit arrangement shall be the amount of the liability in respect of that arrangement or variation which is shown, in accordance with proper practices as required by regulation 25, in the authority’s accounts.
PART 3
CAPITAL RECEIPTS
SUMS TO BE TREATED AS CAPITAL RECEIPTS
Repayment of loan etc. to a local authority
6.—(1) For the purposes of Chapter 1 of Part 1, the following sums must be treated as capital receipts—
(a)
(a) the repayment to a local authority of, or payment to a local authority in respect of, any grant or other financial assistance given by the local authority of such a description that, if the giving of that financial assistance had been expenditure incurred at the time of the repayment or payment, it would have constituted capital expenditure; and
(b)
(b) the repayment to a local authority of the principal of an advance made by the local authority for such a purpose that, if the making of the advance had been expenditure incurred at the time of the repayment, it would have constituted capital expenditure.
(2) For the purposes of paragraph 1(a), sums received by a local authority in connection with the repayment of any grants or other financial assistance —
(a)
(a) to an officer of the authority pursuant to the terms and conditions of that officer’s employment; or
(b)
(b) in connection with the appointment of a person as an officer of the authority, to that person
in so far as, apart from this regulation, it would be a receipt for capital purposes, shall not be expenditure for capital purposes.
Disposal of mortgage portfolio
7. For the purposes of Chapter 1 of Part 1, a sum received by a local authority in respect of the disposal of the authority’s rights and obligations as mortgagee of any housing land which, apart from this regulation, would not be a capital receipt must be treated as a capital receipt.
Payment made to redeem landlord’s share
8. For the purposes of Chapter 1 of Part 1, where an interim or final payment is made to a local authority in accordance with Schedule 6A to the Housing Act 198513(Redemption of landlord’s share), the sum received by the authority must be treated as a capital receipt if, apart from this regulation, it would not be a capital receipt.
SUMS NOT TO BE TREATED AS CAPITAL RECEIPTS
Capital receipts not exceeding £10,000
A sum received by a local authority which, apart from this regulation, would be a capital receipt by virtue of section 9(1) must not be treated for the purposes of Chapter 1 of Part 1 as a capital receipt if the aggregate of all sums received or to be received by the authority in respect of the disposal of an interest in a capital asset, for which the sum is paid, does not exceed £10,000.
A sum received by a local authority which, apart from this regulation, would be treated as a capital receipt by virtue of regulation 6, must not be treated for the purposes of Chapter 1 of Part 1 as a capital receipt if the aggregate of all sums received or to be received by the authority in respect of—
the repayment of a grant or other financial assistance;
the payment made in respect of a grant or other financial assistance; or
the repayment of the principal of an advance,
as the case may be, in respect of which the sum is paid, does not exceed £10,000.
A sum received by a local authority which, apart from this regulation, would be treated as a capital receipt by virtue of regulation 7, must not be treated for the purposes of Chapter 1 of Part 1 as a capital receipt if the aggregate of all sums received or to be received by the authority in respect of the disposal of the authority’s rights and obligations, for which the sum is paid, does not exceed £10,000.
A sum received by a local authority which, apart from this regulation, would be treated as a capital receipt by virtue of regulation 8, must not be treated for the purposes of Chapter 1 of Part 1 as a capital receipt if the aggregate of all sums received or to be received by the authority in respect of redemption of the landlord’s share, for which the sum is paid, does not exceed £10,000.
A notional capital receipt which, apart from this regulation, would be treated as a capital receipt received by a local authority by virtue of regulation 15(5), must not be treated for the purposes of Chapter 1 of Part 1 as a capital receipt if the aggregate of all sums received or to be received by the authority, including the amount of all notional capital receipts determined, in respect of the disposal of the interest in housing land, for which the notional capital receipt is determined, does not exceed £10,000.
POOLING OF RECEIPTS
Pooling of receipts from disposals of housing land
10.—(1) This regulation applies to capital receipts, received by a local authority which has a debt-free housing revenue account at the date of the disposal, on or after the date of the coming into force of these Regulations, which a local authority derives from the disposal of an interest in housing land other than a disposal which is a qualifying disposal.
(2) For the purposes of paragraph (1) “debt-free” housing revenue account means a housing revenue account where the opening HRA capital financing requirement...
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