Local Government and Housing Act 1989

Charge of expenditure to revenue accounts

41Expenditure to be charged to revenue account

(1)All expenditure incurred by a local authority, other than expenditure excluded by section 42 below, must be charged to a revenue account of the authority and unless, in accordance with proper practices (exclusive of this subsection), it is appropriate to charge some or all of any particular item of expenditure to a revenue account for an earlier or a later financial year, the expenditure shall be charged to a revenue account of the authority for the year in which it is incurred.

(2)In relation to a local authority, any reference to a revenue account is a reference to one of the following accounts for a financial year of the authority, namely—

(a)a revenue account which the authority are required to keep by virtue of any enactment;

(b)a revenue account which the authority are required to keep in order to comply with proper practices; or

(c)any other revenue account which the authority decide to keep in accordance with proper practices.

(3)The reference in subsection (1) above to expenditure incurred by a local authority in any financial year includes the following (whether or not giving rise to actual payments)—

(a)any amount which does not form part of the authority’s capital receipts and which is set aside for the year by the authority as provision to meet credit liabilities, otherwise than by virtue of any of subsections (2) to (4) of section 63 below; and

(b)any other amount which is set aside for the year by the authority as reasonably necessary for the purpose of providing for any liability or loss which is likely or certain to be incurred but is uncertain as to the amount or the date on which it will arise (or both);

and the reference in subsection (5) below to expenditure incurred by a local authority shall be construed in accordance with this subsection.

(4)Subsection (2) above has effect not only for the purposes of this Act but also for the purposes of—

(a)any enactment passed after or in the same Session as this Act; and

(b)any earlier enactment which is amended by this Act or by any such enactment as is referred to in paragraph (a) above.

(5)Nothing in this section or the following provisions of this Part shall permit an authority to charge to a revenue account which they are required to keep by virtue of Part VI of this Act or any other enactment any expenditure incurred by a local authority which could not otherwise be so charged.

42Expenditure excluded from section 41(1)

(1)Expenditure falling within subsection (2) below is excluded from the obligation in section 41(1) above but, if it is consistent with proper practices and the authority so wish, any such expenditure may be charged to a revenue account of the authority for the financial year in which it is incurred or an earlier or later financial year.

(2)Subject to subsection (4) below, the expenditure referred to in subsection (1) above is as follows—

(a)expenditure arising from the discharge of any liability of the authority under a credit arrangement, other than an arrangement excluded by regulations under paragraph 11 of Schedule 3 to this Act;

(b)expenditure arising from the discharge of any liability of the authority in respect of money borrowed by the authority, other than a liability in respect of interest;

(c)expenditure which, in reliance on a credit approval, the authority have determined under section 56(1)(a) below is not to be chargeable to a revenue account of the authority;

(d)expenditure on making approved investments;

(e)expenditure consisting of the application or payment of capital receipts as mentioned in subsections (7) to (9) of section 59 below;

(f)expenditure which is met out of the usable part of capital receipts, in accordance with section 60(2) below;

(g)expenditure for capital purposes which the authority determine is, or is to be, reimbursed or met out of money provided, or to be provided, by any other person, excluding grants from a Community institution;

(h)expenditure in respect of payments out of a superannuation fund which the authority are required to keep by virtue of the [1972 c. 11.] Superannuation Act 1972; and

(i)expenditure in respect of payments out of a trust fund which is held for charitable purposes and of which the authority are a trustee.

(3)A determination under subsection (2)(g) above may not be made later than 30th September in the financial year following that in which the expenditure in question is incurred.

(4)Regulations made by the Secretary of State may amend subsection (2) above—

(a)by adding a description of expenditure specified in the regulations to the expenditure falling within that subsection; or

(b)by removing a description of expenditure specified in the regulations from the expenditure falling within that subsection (whether the expenditure so specified was within that subsection as originally enacted or was added by virtue of this subsection).

(5)Where, by virtue of subsection (1) above, expenditure of any description is excluded from the obligation in section 41(1) above, it shall also be excluded from any requirement arising under any enactment (including an enactment in Part VI of this Act) under which the expenditure is required to be charged to a revenue account or any particular revenue account; but if—

(a)an authority decide that expenditure of that description should be charged to a revenue account as mentioned in subsection (1) above, and

(b)under any such requirement that expenditure (apart from this subsection) would have to be charged to a particular revenue account,

that expenditure may be charged only to that revenue account.