Explanatory note

Part 1 of the Local Government and Public Involvement in Health Act 2007 (the “2007 Act”) provides for the establishment of a single tier of local government for areas in England. There is a single tier of local government for an area if there is either a county council and no district councils for that area, or a district council and no county council for that area (section 1(2) of the 2007 Act). Where the Secretary of State has received a proposal or a recommendation that there should be a single tier of local government for an area, he may make an order to implement the proposal or recommendation with or without modification. These Regulations make incidental, consequential, transitional and supplementary provision of general application in relation to the exercise of certain functions for the purposes of, and in consequence of, orders made by the Secretary of State under section 7 of the 2007 Act (“section 7 orders”). Section 14(3) of the 2007 Act provides for these Regulations to have effect subject to any provision included in such an order.

Regulation 1(2) provides that these Regulations have no effect on matters for which provision has been made in other regulations under Chapter 1 of Part 1 of the 2007 Act or in agreements under section 16 of the 2007 Act.

Regulation 2 contains definitions.

Regulation 3 specifies for the purposes of section 89(2C) of the Local Government Finance Act 1988 (“the 1988 Act”) the date on which a single tier council that succeeds a shadow council or a preparing council which is a county council is to establish a collection fund. The specified date is that which falls one day after the shadow council or, as the case may be, the preparing county council makes its calculations under section 32 of the Local Government Finance Act 1992 (“the 1992 Act”) for the financial year beginning on the reorganisation date.

Regulation 4 specifies 1st April 2009 as the date on which a single tier council that succeeds a shadow council or a preparing council which is a county council is to establish its general fund. The date is specified for the purposes of section 91(3D) of the 1988 Act.

Regulation 5 modifies the Local Authorities (Funds) (England) Regulations 1992. The effect of the modifications, which are set out in the Schedule to the Regulations, requires a shadow council or a preparing council which is a county council to deal with the allocation of surpluses and deficits in respect of the year ending immediately before the reorganisation date in the collection funds of councils which will cease to exist on that date. The amounts allocated to predecessor district councils as their share of surpluses and deficits in their collection funds are to be treated as shares of surpluses and deficits of those predecessor councils’ related single tier councils. A district council which is both a billing authority for the purposes of Part 1 of the 1992 Act (council tax) and a single tier council may retain the share of any surplus or deficit in its own collection fund that would have passed to the county council (as a major precepting authority) if that council had continued to exist. (The billing authority is entitled to this share in addition to the share to which it is entitled as billing authority.) The amount of a predecessor county council’s share (as a major precepting authority) of any surplus or deficit in the collection fund of predecessor district councils is to be treated as belonging to or to be borne by the single tier council.

The modifications also provide for shadow councils and preparing councils which are county councils to prepare a schedule of instalments of amounts payable by their related single tier councils to those councils’ major precepting authorities (police and fire and rescue authorities) in the financial year beginning on the reorganisation date.

Regulation 6 relates to the setting of council tax under the 1992 Act. It requires a billing authority within whose area charter trustees are likely to be established on the reorganisation date to anticipate the amount likely to be required for the discharge of the charter trustees’ functions in the financial year beginning on the reorganisation date, and to treat that amount as a “special item” for the purposes of calculating the basic amount of its council tax for that year. Regulation 6(3) makes consequential modifications to sections 37, 52X and 52Y of the 1992 Act.

Regulation 7 amends regulation 6(1) of the Local Government (Structural Changes) (Transfer of Functions, Property, Rights and Liabilities) Regulations 2008. It substitutes the definition of “financial reserves”. The new definition differs in two respects from that contained in the original regulation 6(1): paragraph (a) has been corrected to refer to section 69(2A)(b) of the Local Government Finance Act 1992, and paragraph (b) does not specify particular purposes for which a predecessor council’s capital receipts were applied before the reorganisation date.

No impact assessment has been produced for these Regulations as no impact on the private or voluntary sectors is foreseen.