Explanatory note

Section 72(3) of the Local Government, Planning and Land Act 1980 limits the prescribed expenditure of a local authority, and other bodies to whom Part VIII of the Act applies, to the aggregate of various amounts including its net capital receipts.“Prescribed expenditure” is essentially expenditure of a capital nature.

Regulations may provide that only a proportion of net capital receipts of any specified class may be taken into account and that specified expenditure shall not be prescribed expenditure. Provision is currently made about these matters by the Local Government (Prescribed Expenditure) Regulations 1983. Schedule 1 to the Regulations set out a series of proportions for various classes of receipts, and Schedule 3 specifies expenditure which is not to be prescribed expenditure.

These Regulations amend the 1983 Regulations. They substitute a new Schedule 1 with one change of substance. A proportion of 20% is prescribed for authorities in England and 15% for authorities in Wales in the case of receipts arising from the repayment of advances made pursuant to any regulations that may be made under sections 450A and 540B of the Housing Act 1985 (advances to enable a person to pay a service charge). The Schedule is, however, reproduced in full with amendments to take account of the consolidation of housing legislation by the Housing Act 1985.

A substitute entry is made in Schedule 3 to the 1983 Regulations. Expenditure on acquiring interests in and rights over vehicles, vessels, plant, machinery and apparatus is not to be prescribed expenditure if the arrangements relating to the acquisition of the interest or right satisfy specified conditions and the estimated value of the asset at the end of the arrangement is not less than 10% of its value at the beginning of the arrangement.

Spent provisions are revoked and other references to housing legislation brought up to date.