Regulation 5 Loans and guarantees

After regulation 24D insert—

“Interest on stepped interest rate loans taken out by local authorities

24E

(1)

This regulation applies—

(a)

where on any day before 21 January 2008 —

(i)

a local authority had taken out a stepped interest rate loan, and

(ii)

that loan had not been repaid in full; and

(b)

in relation to financial years beginning on or after 1 April 2007.

(2)

Where this regulation applies, the amount the local authority charges to its revenue account with respect to the interest payable on the loan must be either—

(a)

the amount of the interest, if any, which it is due to pay in the financial year in accordance with the loan agreement for that loan; or

(b)

calculated in accordance with the accounting practices identified in regulation 25.

(3)

In this regulation, “stepped interest rate loan” means a loan taken out by a local authority at an interest rate which increases in one or more increments through the life of the loan.

Financial guarantees given by local authorities

24F

(1)

This regulation applies—

(a)

where before 21 January 2008 a local authority has given a financial guarantee on behalf of another person; and

(b)

in relation to financial years beginning on or after 1 April 2007.

(2)

Where this regulation applies, the amount the local authority charges to its revenue account with respect to the guarantee must be calculated either—

(a)

in accordance with proper practices for the financial year beginning on 1 April 2006; or

(b)

in accordance with the accounting practices identified in regulation 25.”.