Local Government, Planning and Land Act 1980

Section 164.

SCHEDULE 31 Urban Development Corporations: Finance etc.

PART I Preliminary

1 (1) References in this Schedule to a corporation are to an urban development corporation.

(2) The financial year of a corporation shall begin with 1 April and references to a financial year in relation to a corporation shall be construed accordingly.

PART II Finance

Financial duties

2 (1) After consultation with a corporation, the Secretary of State may, with the Treasury's approval, determine the financial duties of the corporation, and different determinations may be made in relation to different corporations or for different functions and activities of the same corporation.

(2) The Secretary of State shall give the corporation notice of every determination, and a determination may—

(a) relate to a period beginning before the date on which it is made ;

(b) contain incidental or supplementary provisions;

(c) be varied by a subsequent determination.

Government grants

3 (1) The Secretary of State may (out of money provided by Parliament and with the Treasury's consent) pay to a corporation, in respect of the exercise of its functions and in respect of its administrative expenses, such sums as he may (with the Treasury's approval) determine.

(2) The payment may be made on such terms as the Secretary of State (with the Treasury's approval) provides.

Borrowing

4 (1) A corporation may borrow temporarily, by way of overdraft or otherwise, such sums as it may require for meeting its obligations and discharging its functions—

(a) in sterling from the Secretary of State, or

(b) with the consent of the Secretary of State, or in accordance with any general authority given by the Secretary of State, either in sterling or in a currency other than sterling from a person other than the Secretary of State.

(2) A corporation may borrow otherwise than by way of temporary loan such sums as the corporation may require—

(a) in sterling from the Secretary of State, or

(b) with the consent of the Secretary of State, in a currency other than sterling from a person other than the Secretary of State,

(3) The Secretary of State may lend to a corporation any sums it has power to borrow from him under sub-paragraph (1) or (2) above.

(4) The Treasury may issue to the Secretary of State out of the National Loans Fund any sums necessary to enable him to make loans under sub-paragraph (3) above.

(5) Loans made under sub-paragraph (3) above shall be repaid to the Secretary of State at such times and by such methods, and interest on the loans shall be paid to him at such times and at such rates, as he may determine.

(6) All sums received by the Secretary of State under sub-paragraph (5) above shall be paid into the National Loans Fund.

(7) References in this paragraph to the Secretary of State are references to him acting with the Treasury's approval.

Guarantees

5 (1) The Treasury may guarantee, in such manner and on such conditions as they think fit, the repayment of the principal of and the payment of interest on any sums which a corporation borrows from a person or body other than the Secretary of State.

(2) Immediately after a guarantee is given under this paragraph, the Treasury shall lay a statement of the guarantee before each House of Parliament; and where any sum is issued for fulfilling a guarantee so given, the Treasury shall lay before each House of Parliament a statement relating to that sum, as soon as possible after the end of each financial year, beginning with that in which the sum is issued and ending with that in which all liability in respect of the principal of the sum and in respect of interest on it is finally discharged.

(3) Any sums required by the Treasury for fulfilling a guarantee under this paragraph shall be charged on and issued out of the Consolidated Fund.

(4) If any sums are issued in fulfilment of a guarantee given under this paragraph, the corporation shall make to the Treasury, at such times and in such manner as the Treasury may from time to time direct, payments of such amounts as the Treasury so direct in or towards repayment of the sums so issued and payments of interest, at such rates as the Treasury so direct, on what is outstanding for the time being in respect of sums so issued.

(5) Any sums received by the Treasury in pursuance of subparagraph (4) above shall be paid into the Consolidated Fund.

Assumed debt

6 (1) On any acquisition to which this paragraph applies, a corporation shall assume a debt to the Secretary of State of such amount as may be notified to the corporation in writing by him, with the Treasury's approval.

(2) This paragraph applies to any acquisition by the corporation of property held—

(a) by or on behalf of the Crown, or

(b) by a company all of whose shares are held by or on behalf of the Crown or by a wholly owned subsidiary of such a company.

(3) Subject to sub-paragraph (4) below, the amount to be notified is the aggregate of the following: —

(a) the consideration given when the property was first brought into public ownership, and

(b) the costs and expenses of and incidental to its being brought into public ownership.

(4) If it appears to the Secretary of State that there has been such a change in circumstances since the property was first brought into public ownership that its true value would not be reflected by reference to the consideration mentioned in sub-paragraph (3) above, the Secretary of State, with the Treasury's approval, shall determine the amount to be notified.

(5) The rate of interest payable on the debt assumed by a corporation under this paragraph, and the date from which interest is to begin to accrue, the arrangements for paying off the principal, and the other terms of the debt shall be such as the Secretary of State, with the Treasury's approval, may from time to time determine.

(6) Different rates and dates may be determined under sub-paragraph (5) above with respect to different portions of the debt.

(7) Any sums received by the Secretary of State under sub-paragraph (5) above shall be paid into the National Loans Fund.

Surplus funds

7 (1) Where it appears to the Secretary of State, after consultation with the Treasury and the corporation, that a corporation has a surplus, whether on capital or on revenue account, after making allowance by way of transfer to reserve or otherwise for its future requirements, the corporation shall, if the Secretary of State with the approval of the Treasury and after consultation with the corporation so directs, pay to the Secretary of State such sum not exceeding the amount of that surplus as may be specified in the direction.

(2) Any sum received by the Secretary of State under this paragraph shall, subject to sub-paragraph (4) below, be paid into the Consolidated Fund.

(3) The whole or part of any payment made to the Secretary of State by a corporation under sub-paragraph (1) above shall, if the Secretary of State with the Treasury's approval so determines, be treated as made by way of repayment of such part of the principal of loans under paragraph 4(3) above, and as made in respect of the repayments due at such times, as may be so determined.

(4) Any sum treated under sub-paragraph (3) above as a repayment of a loan shall be paid by the Secretary of State into the National Loans Fund.

Financial limits

8 (1) The aggregate amount of the sums mentioned in sub-paragraph (2) below shall not exceed £200 million or such greater sum not exceeding £400 million as the Secretary of State may by order made by statutory instrument specify.

(2) The sums are—

(a) sums paid to all corporations under paragraph 3 above ;

(b) sums borrowed by all corporations under paragraph 4(1) above minus repayments made in respect of the sums;

(c) sums borrowed by all corporations under paragraph 4(2) above (ignoring repayments made in respect of the sums);

(d) sums issued by the Treasury in fulfilment of guarantees under paragraph 5 above of debts of all corporations.

(3) No order under sub-paragraph (1) above shall have effect until approved by a resolution of the House of Commons.

Grants and loans: accounts

9 (1) The Secretary of State shall prepare in respect of each financial year an account—

(a) of the sums paid to corporations under paragraph 3 above,

(b) of the sums issued to him under paragraph 4(4) above and the sums received by him under paragraph 4(5) above and of the disposal by him of those sums, and

(c) of the sums paid into the Consolidated Fund or National Loans Fund under paragraph 7 above.

(2) The Secretary of State shall send the account to the Comptroller and Auditor General before the end of the month of November next following the end of that year.

(3) The Comptroller and Auditor General shall examine, certify and report on the account and lay copies of it and of his report before each House of Parliament.

(4) The form of the account and the manner of preparing it shall be such as the Treasury may direct.

PART III General Accounts etc.

Accounts

10 (1) A corporation shall keep proper accounts and other records in relation to them,

(2) The accounts and records shall show, in respect of the financial year to which they relate, a true and fair view of the corporation's activities.

(3) A corporation shall prepare in respect of each financial year a statement of accounts complying with any requirement which the Secretary of State has (with the Treasury's consent) notified in writing to the corporation relating to—

(a) the information to be contained in the statement;

(b) the manner in which the information is to be presented ; and

(c) the methods and principles according to which the statement is to be prepared.

(4) Subject to any requirement notified to the corporation under sub-paragraph (3) above, in preparing any statement of accounts in accordance with that sub-paragraph the corporation shall follow, with respect to each of the matters specified in paragraphs (a) to (c) of that sub-paragraph, such course as may for the time being be approved by the Secretary of State with the Treasury's consent.

Audit

11 (1) The corporation's accounts and statements of accounts shall be audited by an auditor to be appointed annually by the Secretary of State in relation to the corporation.

(2) A person shall not be qualified for appointment under subparagraph (1) above unless he is qualified for appointment as auditor of a company under section 161 of the [1948 c. 38.] Companies Act 1948.

(3) A person shall not be qualified for appointment under subparagraph (1) above if the person is—

(a) a member, officer or servant of the corporation,

(b) a partner of, or employed by, a member, officer or servant of the corporation, or

(c) a body corporate.

Transmission to Secretary of State

12 As soon as the accounts and statement of accounts of the corporation for any financial year have been audited, the corporation shall send to the Secretary of State a copy of the statement, together with a copy of any report made by the auditor on the statement or on the accounts.

Reports

13 (1) As soon as possible after the end of each financial year, a corporation shall make to the Secretary of State a report dealing generally with the corporation's operations during the year, and shall include in the report a copy of its audited statement of accounts for that year.

(2) Without prejudice to the generality of sub-paragraph (1) above, a report under this paragraph shall deal with the operation during the year of the corporation's arrangements for consultation about the exercise of its powers with local authorities the whole or any part of whose area is included in the urban development area.

(3) The Secretary of State shall lay a copy of the report before each House of Parliament.

Information

14 Without prejudice to paragraph 13 above, a corporation shall provide the Secretary of State with such information relating to its undertaking as he may require, and for that purpose shall permit any person authorised by the Secretary of State to inspect and make copies of the accounts, books, documents or papers of the corporation and shall afford such explanation of them as that person or the Secretary of State may reasonably require.