I beg to move Amendment No. 19, in page 35, line 47, leave out 'period of account' and insert 'year'.We come now to a series of Government amendments up to and including Amendment No. 41 which are all directed towards a redrafting of Schedule 3. If I were to make a general explanation of what we are attempting here, perhaps it would be for the convenience of the House to consider them together. None of these raises any point of principle. I have already circulated to those hon. Members who were members of the Standing Committee a revised version of Schedule 3, so that they will have been able to judge whether we are making any proposals to which they are opposed.
We are grateful to the Minister for sending us an explanation of this complicated schedule. We are quite happy to consider these amendments together.
In that event, perhaps I might explain that Schedule 3 deals with borrowing and lending by local authorities and with certain of their funds. As drafted, it is basically a consolidation and restatement of the existing law. But many of the provisions are now out of date and, since Second Reading, we have discussed these matters with the local authority financial officers. They agree with us that it would be more satisfactory to take some of the detailed provisions out of the schedule and to provide for them by way of regulations.There is also a restatement and tidying up of a number of parts of the Schedule where we had not got the wording quite right. We have also made some rearrangement of the provisions. If any hon. Member feels unhappy about any part of the Schedule and lets me know about it between now and consideration of the Bill in the other place, I shall be happy to consider it and to see whether we can deal with it or explain what we are doing.
Amendment agreed to.
No. 20, in page 36, line 42, leave out 'derived'.
No. 21, in line 46, leave out 'derived'.
No. 22, in line 49, leave out 'derived from rates' and insert 'as aforesaid'.
No. 23, in page 37, line 10, leave out paragraphs 8 to 10.
No. 24, in page 38, line 37, after 'and', insert:
'all money borrowed by a local authority by whatever method shall be deemed to have the same charge and security and shall rank pari passu'
No. 25, in page 39, line 38, after 'thereon', insert:
'and shall be part of the general fund of the authority'.
No. 26, in line 39, leave out '16 to 36' and insert '15A to 35A'.
No. 27, in line 42, at end insert—
'15A.—(1) All capital assets and liabilities which are transferred to a local authority from an authority which ceases to exist on 16th May 1975, other than property which is subject to section 128 of the Act of 1973 or which is referred to in section 222(2) or 223 of that Act, shall be paid into or transferred to the loans fund of the local authority.
(2) All investments transferred to the loans fund as from 16th May 1975 shall be entered in the accounts of the loans fund at the value shown on the account from which they are transferred.'.
No. 28, in page 40, line 10, leave out paragraphs 17 to 32 and insert—
'17.—(1) Subject to sub-paragraph (2) below, all sums advanced to a borrowing account of a local authority or to a relevant authority shall be repaid within the fixed period by equal yearly or half-yearly instalments of principal, or, where repayment is on the annuity system, by equal yearly or half-yearly instalments of principal and interest combined; and the authority shall in each year debit the borrowing account or charge to the relevant authority the sums required in that year for the repayment of the advance.
(2) In any case where—
(a) a local authority make an advance to any person and the expenditure incurred in making the advance is defrayed by borrowing; and (b) the terms of that advance are such that repayment is to be made otherwise than by equal yearly or half-yearly instalments of principal or of principal and interest combined; and (c) apart from this sub-paragraph, the local authority would have no power, with respect to the expenditure referred to in paragraph (a) above, to vary the sums which would otherwise be debited or charged under sub-paragraph (1) above or to suspend their obligation under that sub-paragraph,the local authority may, under sub-paragraph (1) above, debit to the borrowing account from which, or charge to the relevant authority by whom, the expenditure referred to in paragraph (a) above would otherwise fall to be defrayed, sums of different amounts (whether or not including instalments of principal) in respect of different years in order to take account of the terms on which their advance falls to be repaid.
(3) Subject to paragraph 18 below, the first payment to the loans fund shall be made within twelve months, or where the money is repayable by half-yearly instalments within six months, from the date of the advance.
18.—(1) Where a sum is advanced from the loans fund in accordance with paragraph 16 above for any of the following purposes—
(a) meeting expenditure on the construction of new, or the extension or alteration of existing works forming or to form part of an undertaking of a revenue-producing character; (b) carrying out on land any other operations, being operations of a prescribed kind or operations specified in relation to that land by direction of the Secretary of State; (c) acquiring land for the purpose of the construction thereon of new, or the extension or alteration of existing, works forming or to form part of an undertaking of a revenue-producing character, or for the purpose of carrying out thereon of operations of a kind prescribed by virtue of paragraph (b) above, or operations specified in relation to that land by direction of the Secretary of State; (d) acquiring land specified by direction of the Secretary of State;the authority may, subject to the consent of the Secretary of State, suspend in whole or in part any annual provision required under paragraph 17 above for the repayment from the borrowing account or by the relevant authority of the sum so advanced for such period (not being a period longer than the period during which the expenditure remains unremunerative or the period of five years from the commencement of the year next after that in which the expenditure commences to be incurred, whichever is the shorter) and subject to such conditions as the Secretary of State may determine.
(2) Where any annual provision required to be made for the repayment of any sum has been suspended under sub-paragraph (1) above, a local authority may borrow for the purpose of payment, during the period of the suspension, of interest on that sum.
(3) Where by virtue of paragraph 17 above a local authority are required to debit a sum to the borrowing account or charge a sum to a relevant authority and they suspend, in whole or in part, any annual provision for the repayment of the principal, they may refrain from debiting to that account or charging to the relevant authority an amount equal to the amount of the annual provision so suspended.
(4) In this paragraph "prescribed" means prescribed by regulations made by the Secretary of State.
19.—(1) The authority shall at the time an advance is made under paragraph 16 above determine—
(a) the period within which the advance is to be repaid to the loans fund, being a period not exceeding the fixed period; and (b) the amount of each of the periodical payments required to repay the advance within the period so determined, and the date on which the first of the said payments is to be made.
(2) The periodical payments shall be either equal yearly or half-yearly instalments of principal or, where the advance is to be repaid on the annuity system, equal yearly or half-yearly instalments of principal and interest combined, the amount of principal included in each instalment being separately stated.
(3)The periodical payments shall so far as practicable be so adjusted as to be expressed in complete pounds.
(4) This paragraph shall apply with the necessary modifications in the case of advances from the loans fund to a relevant authority.'.
No. 29, in page 46, line 23, after 'Schedule', insert:
'or any regulations made thereunder'.
No. 30, in line 26, at end insert:
'or such regulations'.
No. 31, in line 33, leave out paragraph 35 and insert—
'35.—(1) If at any time any sums due by way of principal or interest on any security created by a local authority remain unpaid for a period of two months after demand in writing, the person entitled thereto, being the holder of such a security to the amount of not less than £1,000, or the persons entitled thereto, being the holders of such securities amounting together to not less than £2,000, may present a petition to the Court of Session for the appointment of a judicial factor, and the Court may, if they think fit, appoint a judicial factor.
(2) Subject to the directions of the Court, the judicial factor shall have all the powers of the local authority or their proper officer of levying rates, making requisitions on rating authorities and collecting and recovering sums due to the authority in respect of rates or requisitions and any other sums whatsoever due to the authority and such other powers and duties as the Court think fit, and shall apply all moneys received by him, after payment of expenses including a proper remuneration for his trouble, as the Court direct for the purposes of this Schedule.
(3) The judicial factor shall have such access to and use of the books and documents of the local authority as he may require.
(4) The powers conferred by this paragraph shall be in addition to and not in derogation of any other powers competent to the holder of a security for enforcing payment of the sums due under the security.
35A.—(1) Notwithstanding anything in this Schedule, the Secretary of State may by regulations make such provision as appears to him necessary or expedient with respect to the operation of the loans fund of a local authority and such regulations may apply generally or in the case of any particular authority or class of authority.
(2) A statutory instrument containing regulations under this paragraph shall be subject to annulment in pursuance of a resolution of either House of Parliament.'.
No. 32, in page 47, line 9, at beginning insert:
'Notwithstanding anything in any enactment.'.
No. 33, in line 12, after 'be', insert:
'advanced to the loans fund or'.
No. 34, in page 48, line 32, after 'of', insert 'paragraphs 1 to 12 of'.
No. 35, in line 35, leave out 'that section' and insert 'any enactment'.
No. 36, in line 40, leave out from 'borrowed' to end of line 41 and insert
'before the commencement of this Act by a local authority under a local enactment'.
No. 37, in page 49, line 10, leave out 'money borrowed' and insert
'sum advanced to a borrowing account or to a relevant authority'.
No. 38, in line 11, leave out 'borrowing' and insert 'the advance'.
No. 39, to leave out lines 15 and 16.
No. 40, to leave out lines 19 and 20.
No. 41, to leave out 'cash credit'.—[ Mr. Millan.]