N.I.
Local Government Finance Act (Northern Ireland) 2011
2011 CHAPTER 10
An Act to make provision for the financial affairs of district councils; to make provision relating to grants to district councils and for payments to councillors and other payments by district councils.
[16th March 2011]
BE IT ENACTED by being passed by the Northern Ireland Assembly and assented to by Her Majesty as follows:
PART 1 N.I.FINANCIAL ADMINISTRATION
GeneralN.I.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Accounting practicesN.I.
2—(1) Regulations may make provision about the accounting practices to be followed by a council, in particular with respect to the charging of expenditure to the general fund.
(2) The Department may issue guidance about the accounting practices to be followed by a council, in particular with respect to the charging of expenditure to the general fund.
(3) In any statutory provision, any reference to proper practices, in relation to accounts of a council, is to those accounting practices—
(a)which the council is required to follow by virtue of any statutory provision, or
(b)which, whether by reference to any generally recognised published code or otherwise, are regarded as proper accounting practices to be followed in the keeping of accounts of councils, either generally or of the description concerned.
(4) In the event of conflict between practices falling within paragraph (a) of subsection (3) and practices falling within paragraph (b) of that subsection, only those falling within paragraph (a) are to be regarded as proper practices.
(5) In this section “council” includes any local government body within the meaning of Part 2 of the Local Government (Northern Ireland) Order 2005 (NI 18).
Commencement Information
I1S. 2 wholly in operation at 1.4.2012; s. 2 not in operation at Royal Assent see s. 47(1); s. 2 in operation for certain purposes at 10.9.2011 otherwise 1.4.2012 by S.R. 2011/306, art. 2(1)(3), Sch.
Annual budgetN.I.
Annual budgetN.I.
3—(1) In each financial year a council shall cause to be submitted to it estimates of the income and expenditure of the council during the next financial year.
(2) A council, before the prescribed date in each year—
(a)shall consider the estimates for the next financial year;
(b)may revise the estimates in such manner as the council thinks fit;
(c)shall approve the estimates, subject to any revision under paragraph (b);
(d)shall authorise the expenditure included in the estimates; and
(e)shall fix for the next financial year the amount estimated to be required to be raised by means of rates made by the council.
(3) No expenditure shall be incurred by or on behalf of a council unless—
(a)previously authorised in accordance with the estimates approved by the council; or
(b)otherwise previously authorised by the council; or
(c)if not so authorised, necessarily incurred in circumstances of emergency;
but any expenditure under paragraph (c) shall, as soon as reasonably practicable, be reported to the council with a view to being approved by the council.
(4) A council may make standing orders for the purpose of giving effect to this section so long as they are not inconsistent with any statutory provision.
Commencement Information
I2S. 3 wholly in operation at 1.4.2012; s. 3 not in operation at Royal Assent see s. 47(1); s. 3 in operation for certain purposes at 10.9.2011 otherwise 1.4.2012 by S.R. 2011/306, art. 2(1)(3), Sch.
ReservesN.I.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .FundsN.I.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .BorrowingN.I.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Duty to determine affordable borrowing limitN.I.
13—(1) A council shall determine and keep under review how much money it can afford to borrow.
(2) Regulations may make provision about the performance of the duty under subsection (1).
(3) Regulations under subsection (2) may, in particular—
(a)make provision about—
(i)when a determination under subsection (1) is to be made,
(ii)how such a determination is to be made, and
(iii)the period for which such a determination is to be made;
(b)make provision about the monitoring of an amount determined under subsection (1);
(c)make provision about factors to which regard may be had in making a determination under subsection (1) or in monitoring an amount determined under that subsection.
(4) Regulations under subsection (2) may include provision requiring a council making a determination under subsection (1) to have regard to one or more specified codes of practice, whether issued by the Department or otherwise.
(5) A council's function under subsection (1) shall be discharged only by the council.
(6) The power under subsection (4) is not to be read as limited to the specification of an existing document.
Commencement Information
Credit arrangementsN.I.
“Credit arrangements”N.I.
17—(1) For the purposes of this Part, a council shall be taken to have entered into a credit arrangement where—
(a)it enters into a transaction which gives rise to a liability on its part, and
(b)the liability is a qualifying liability.
(2) A transaction entered into by a council is to be taken for the purposes of subsection (1) as giving rise to a liability on the part of the council if—
(a)it falls in accordance with proper practices to be treated for the purposes of the council's accounts as giving rise to such a liability, or
(b)it falls in accordance with regulations to be treated as falling within paragraph (a).
(3) The reference in subsection (1)(b) to a qualifying liability is to any liability other than—
(a)a liability to repay money,
(b)a liability in respect of which the date for performance is less than 12 months after the date on which the transaction giving rise to the liability is entered into, and
(c)a prescribed liability.
Commencement Information
I4S. 17 wholly in operation at 1.4.2012; s. 17 not in operation at Royal Assent see s. 47(1); s. 17 in operation for certain purposes at 10.9.2011 otherwise 1.4.2012 by S.R. 2011/306, art. 2(1)(3), Sch.
Control of credit arrangementsN.I.
18—(1) A council may not enter into, or vary, a credit arrangement if doing so would result in a breach of—
(a)the limit determined by it under section 13, or
(b)any limit applicable to it under section 14.
(2) In applying those limits for the purposes of subsection (1)—
(a)entry into a credit arrangement shall be treated as the borrowing of an amount of money equal to the cost of the arrangement, and
(b)variation of a credit arrangement shall be treated as the borrowing of an amount of money equal to the cost of the variation.
(3) Regulations may make provision about the calculation for the purposes of subsection (2) of the cost of a credit arrangement or a variation and, in particular, about the treatment of options.
Commencement Information
I5S. 18 wholly in operation at 1.4.2012; s. 18 not in operation at Royal Assent see s. 47(1); s. 18 in operation for certain purposes at 10.9.2011 otherwise 1.4.2012 by S.R. 2011/306, art. 2(1)(3), Sch.
Capital expenditureN.I.
“Capital expenditure”N.I.
19—(1) Subject to subsections (2) and (3), references in this Part to capital expenditure, in relation to a council, are to expenditure of the council which falls to be capitalised in accordance with proper practices.
(2) Regulations may provide that expenditure of councils shall be treated for the purposes of this Part as being, or as not being, capital expenditure.
(3) The Department may by direction provide that expenditure of a particular council shall be treated for the purposes of this Part as being, or as not being, capital expenditure.
Commencement Information
I6S. 19 wholly in operation at 1.4.2012; s. 19 not in operation at Royal Assent see s. 47(1); s. 19 in operation for certain purposes at 10.9.2011 otherwise 1.4.2012 by S.R. 2011/306, art. 2(1)(3), Sch.
Capital receiptsN.I.
“Capital receipt”N.I.
20—(1) Subject to subsection (3), references in this Part to a capital receipt, in relation to a council, are to a sum received by the council in respect of the disposal by it of an interest in a capital asset.
(2) An asset is a capital asset for the purposes of subsection (1) if, at the time of the disposal, expenditure on the acquisition of the asset would be capital expenditure.
(3) Regulations may—
(a)make provision for the whole of a sum received by a council in respect of the disposal by it of an interest in a capital asset, or such part of such a sum as may be determined under the regulations, to be treated as not being a capital receipt for the purposes of this Part;
(b)make provision for the whole of a sum received by a council otherwise than in respect of the disposal by it of an interest in a capital asset, or such part of such a sum as may be determined under the regulations, to be treated as being a capital receipt for the purposes of this Part.
(4) Where a sum becomes payable to a council before it is actually received by the council, it shall be treated for the purposes of this section as received by the council when it becomes payable to the council.
Commencement Information
I7S. 20 wholly in operation at 1.4.2012; s. 20 not in operation at Royal Assent see s. 47(1); s. 20 in operation for certain purposes at 10.9.2011 otherwise 1.4.2012 by S.R. 2011/306, art. 2(1)(3), Sch.
Use of capital receiptsN.I.
22—(1) Regulations may make provision about the use of capital receipts by a council.
(2) Regulations under subsection (1) may, in particular, make provision requiring an amount equal to the whole or any part of a capital receipt to be used only to meet—
(a)capital expenditure, or
(b)debts or other liabilities.
Commencement Information
I8S. 22 wholly in operation at 1.4.2012; s. 22 not in operation at Royal Assent see s. 47(1); s. 22 in operation for certain purposes at 10.9.2011 otherwise 1.4.2012 by S.R. 2011/306, art. 2(1)(3), Sch.
InvestmentN.I.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .MiscellaneousN.I.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .GuidanceN.I.
25—(1) In carrying out its functions under this Part, a council shall have regard—
(a)to such guidance as the Department may issue, and
(b)to such other guidance as regulations may specify for the purposes of this section.
(2) The power under subsection (1)(b) is not to be read as limited to the specification of existing guidance.
Commencement Information
I9S. 25 wholly in operation at 1.4.2012; s. 25 not in operation at Royal Assent see s. 47(1); s. 25 in operation for certain purposes at 10.9.2011 otherwise 1.4.2012 by S.R. 2011/306, art. 2(1)(3), Sch.
PART 2 N.I.GRANTS TO COUNCILS
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Rates support grantN.I.
27—(1) The Department shall for each financial year make a grant under this section to councils (unless in any particular case the amount of the grant would be nil).
(2) In this section “the rates support grant” means the grant made under this section for any financial year.
(3) The amount of the rates support grant payable to a council for any financial year shall be determined in accordance with regulations and shall not be reduced during the financial year in question.
(4) Subsection (3) is subject to section 28 (reductions in grants).
(5) Regulations under this section may in particular make provision—
(a)for the amount of the rates support grant to be calculated by reference to a formula;
(b)for determining the manner in which and time at which that calculation is to be made.
(6) The formula may be such that the amount payable is nil.
(7) For the purposes of this section “formula” includes methods, principles and rules of any description.
(8) Regulations under this section may contain any provision for a person to exercise a discretion in dealing with any matter which the Department considers appropriate.
(9) Regulations shall not be made under this section unless a draft of the regulations has been laid before, and approved by a resolution of, the Assembly.
(10) A council shall give the Department such information for the purpose of the calculation mentioned in subsection (5), at such time and in such form as the Department may determine.
(11) Payments in respect of the rates support grant shall be made to a council at such times as the Department may determine.
Commencement Information
I10S. 27 wholly in operation at 1.4.2012; s. 27 not in operation at Royal Assent see s. 47(1); s. 27 in operation for certain purposes at 10.9.2011 otherwise 1.4.2012 by S.R. 2011/306, art. 2(1)(3), Sch.
PART 3 N.I.PAYMENTS TO COUNCILLORS, ETC.
Allowances, etc. for councillorsN.I.
31—(1) Regulations may provide for the payment by councils of such allowances or other payments as may be prescribed to councillors for, or in relation to anything done in connection with, service as councillors.
(2) Payments by a council under the regulations shall be of such amounts or at such rates as may be determined by the council, but shall not exceed such amounts or rates as may be determined by the Department.
(3) Regulations may require each council to make a scheme setting out the amounts or rates of the allowances or other payments determined by the council.
(4) Regulations under subsection (3) may require councils—
(a)to make a scheme by a prescribed date;
(b)to publish a scheme in a prescribed manner.
(5) Payments by a council under the regulations shall be made subject to and in accordance with—
(a)its scheme;
(b)regulations under this section; and
(c)any guidance issued by the Department.
(6) In this section any reference to a council includes a reference to a joint committee and any reference to the district of a council includes a reference to the districts of all the councils which have concurred in appointing the joint committee.
(7) In this section “joint committee” has the same meaning as in the Local Government Act (Northern Ireland) 1972 (c. 9).
Commencement Information
I11S. 31 wholly in operation at 1.4.2012; s. 31 not in operation at Royal Assent see s. 47(1); s. 31 in operation for certain purposes at 10.9.2011 otherwise 1.4.2012 by S.R. 2011/306, art. 2(1)(3), Sch.
Panel to advise on payments to councillorsN.I.
35—(1) Regulations may establish a panel to advise the Department on payments by councils to councillors.
(2) Regulations under this section may make provision relating to the membership and functions of the panel.
(3) Regulations under this section may in particular include provision—
(a)requiring the panel to comply with directions given by the Department (including directions requiring the panel to provide the Department with advice or information in relation to such matters as the Department may direct);
(b)requiring the Department to make available to the panel such premises, staff and services as the panel may reasonably require; and
(c)requiring the Department to pay to members of the panel such allowances as the Department may determine.
InterpretationN.I.
36 In this Part “councillor” includes a member of a committee or sub-committee of a council, whether that person is a member of the council or not, and in section 34(1) includes an officer of a council.
PART 4 N.I.MISCELLANEOUS POWERS TO MAKE PAYMENTS
Payments for special purposesN.I.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Public appealsN.I.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Limit on expenditure under sections 37 and 39N.I.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .SubscriptionsN.I.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .PART 5 N.I.SUPPLEMENTARY
General interpretationN.I.
42 In this Act—
“association” includes any body of persons, corporate or unincorporated;
“chief financial officer” means the officer designated under section 1(2);
“council” means a district council, and in relation to any district means the council for that district;
“the Department” means the Department of the Environment;
“direction” means direction in writing; and “direct” shall be construed accordingly;
“district”, in relation to any council, means the district for which that council acts;
“the general fund” means the fund mentioned in section 8;
“officer” includes servant;
“prescribed” means prescribed by regulations;
“proper practices” shall be construed in accordance with section 2(3) and (4);
“public body” means a body (other than a council) established by or under a statutory provision;
“regulations” means regulations made by the Department;
“statutory provision” has the meaning assigned to it by section 1(f) of the Interpretation Act (Northern Ireland) 1954 (c. 33);
“voluntary body” means any association carrying on or proposing to carry on any activities otherwise than for the purpose of gain by the association or individual members.
Regulations and ordersN.I.
43—(1) Regulations made under any provision of this Act, except section 27, shall be subject to negative resolution.
(2) Regulations and orders under this Act may contain such incidental, supplementary, consequential, transitory or saving provisions as the Department thinks necessary or expedient.
Consultation on regulations, orders and guidanceN.I.
44—(1) Subject to subsection (2), before making any regulations or orders under this Act or issuing any guidance under this Act, the Department shall consult councils and—
(a)such associations representative of councils;
(b)such associations representative of officers of councils; and
(c)such other persons or bodies,
as appear to the Department to be appropriate.
(2) Subsection (1) shall not apply to regulations under section 14(1) or to orders under section 28(3) or 47(2).
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .CommencementN.I.
47—(1) The following provisions of this Act shall come into operation on Royal Assent—
-
section 35;
-
section 36;
-
section 42;
-
section 43;
-
section 44;
-
this section; and
-
section 48.
(2) The other provisions of this Act shall come into operation on such day or days as the Department may by order appoint.
Subordinate Legislation Made
P1S.47(2) fully exercised: different dates appointed for specified provisions by S.R. 2011/306, art. 2, Sch.
Short titleN.I.
48 This Act may be cited as the Local Government Finance Act (Northern Ireland) 2011.
SCHEDULES
Section 45.
SCHEDULE 1N.I.MINOR AND CONSEQUENTIAL AMENDMENTS
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 46.
SCHEDULE 2N.I.REPEALS
Short Title | Extent of repeal |
---|---|
The Local Government Act (Northern Ireland) 1972 (c. 9). | |
The Financial Provisions (Northern Ireland) Order 1978 (NI 11). | Article 9. |
The Local Government (Miscellaneous Provisions) (Northern Ireland) Order 1985 (NI 15). | |
The Trustee Act (Northern Ireland) 2001 (c. 14). | In Schedule 2, paragraph 22. |
The Local Government (Miscellaneous Provisions) (Northern Ireland) Order 2002 (NI 3). | Articles 3 to 7. |
The Local Government (Northern Ireland) Order 2005 (NI 18). |