# The Local Authorities (Capital Finance) Regulations 1997, Regulation 45: Initial cost and cost at any time of arrangements for heating or lighting improvements

Extent: E+W
Status: prospective

(1) In this regulation, “relevant arrangement” means a credit arrangement to which regulation 43(2) or 44(2) applies.
(2) The initial cost of a relevant arrangement shall be the amount which, apart from this regulation, would be the initial cost of the arrangement minus the amount which would be the initial cost assuming that—
(a) no consideration was required to be given in respect of the arrangement in the financial year in which the arrangement comes into being; and
(b) for each subsequent financial year of the arrangement, for the purposes of the formula in section 49(2), “x” was an amount equal to the product of the formula—
A(1+i100)n where—
“A” means the average annual expenditure incurred by the authority during the period of five years ending on the date on which they enter into the arrangement, on operating, maintaining and repairing the heating system or lighting system which is improved or replaced by the works carried out under the arrangement;
“i” means the figure in Table 2.1 of Economic Trends published by the Office for National Statistics as the most recent percentage change, quarter on corresponding quarter of previous year, of the implied gross domestic product deflator at market prices; and
“n” has the same meaning as in section 49(2).
(3) The cost at any time of a relevant arrangement shall be the amount which, apart from this regulation, would be the cost of the arrangement at that time minus an amount equal to the product of the formula—
I×UP where—
“I” means the amount which would be the initial cost of the arrangement calculated on the assumptions mentioned in paragraph (2);
“P” means the number of years comprising the period over which the consideration on the part of the authority under the arrangement falls to be given; and
“U” means the number of years which, at the time in question, comprises the unexpired part of that period.

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Source: https://www.legislation.gov.uk/uksi/1997/319/regulation/45 (the official version)
Page: https://openlegislation.uk/local-authorities-capital-finance-regulations-1997/regulation-45
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.