The Police Act 1997 (Provisions in relation to the NCIS Service Authority) Order 1998

Credit arrangements

G10.—(1) Subject to the following provisions of this article the Authority shall be taken for the purposes of this Part to have entered into a credit arrangement—

(a)in any case where it becomes the lessee of any property (whether land or goods); and

(b)in any case (not falling within sub-paragraph (a) above) where, under a single contract or two or more contracts taken together, it is estimated by the Authority that the value of the consideration which the Authority has still to give at the end of a relevant financial year for or in connection with the provision to the Authority of any land, goods or services or any other kind of benefit is greater than the value of the consideration (if any) which the Authority were still to receive immediately before the beginning of that financial year; and

(c)in any case where the Authority enters into a transaction of the same description as a transaction of a description for the time being prescribed for the purposes of section 48 of the 1989 Act by regulations made by the Secretary of State

and, in any such case, the “credit arrangement” is the lease, the single contract or, as the case may be, the two or more contracts taken together.

(2) The estimate required to be made under sub-paragraph (b) of paragraph (1) above shall be made at the time the contract or, as the case may be, the later or last of the contracts constituting the credit arrangement is entered into; and the reference in that sub-paragraph to a relevant financial year is a reference to a financial year which begins after the contract or, as the case may be, the first of the contracts constituting the arrangement was entered into.

(3) For the purpose of this Part a credit arrangement comes into being—

(a)where paragraph (1)(a) above applies, at the time the Authority become the lessees;

(b)where paragraph (1)(b) above applies, at the time the contract or, as the case may be, the later or latest of the contracts constituting the arrangement is entered into; and

(c)where paragraph (1)(c) above applies, at the time the Authority enter into the transaction concerned or such other time as may be specified in the regulations concerned.

(4) Where a contract constitutes, or two or more contracts taken together constitute, a credit arrangement, no account shall be taken under this article of any later contract which has the effect of varying the effect of the contract or, as the case may be, of the two or more contracts taken together.

(5) A contract is not a credit arrangement to the extent that it is a contract under which the Authority borrows money; and a lease or contract of the Authority which is of the same description as a lease or contract of an authority which is excluded from section 48 of the 1989 Act by regulations made by the Secretary of State under that Act is not a credit arrangement for the purposes of this article.

(6) It is immaterial for the purposes of this article whether the consideration given or received by the Authority under any contract is given to or received from the person by whom the land, goods, services or other benefit are in fact provided to the Authority; and for the purposes of this article, and any of the following provisions of this Part relating to credit arrangements, in any case where the consideration under a contract consists, in whole or in part,—

(a)of an undertaking to do or to refrain from doing something at a future time (whether specified or not), or

(b)of a right to do or to refrain from doing something at such a future time,

that consideration shall be regarded as neither given nor received until the undertaking is performed or, as the case may be, the right is exercised.

(7) Where the consideration under a contract consists, in whole or in part, of an option, the estimate required to be made under paragraph (1)(b) above shall be made—

(a)on the assumption that the option will be exercised or, if the option could be exercised in different ways, on the assumption that it will be exercised in each of those ways, and

(b)on the assumption that the option will not be exercised, and if, on any of those assumptions, the contract would on those estimates constitute, alone or together with one or more other contracts, a credit arrangement, it shall be regarded as doing so regardless of whether the option is or is not in fact exercised; and in this paragraph “option” includes any right which is exercisable or not at the discretion of a party to the contract.

(8) If an existing contract is varied and the variation does not in law itself constitute a contract, it shall be regarded as such for ,the purposes of this article and, accordingly, subject to paragraph (4) above, the existing contract and the variation shall be regarded as two contracts to be taken together.

(9) A lease of any property is excluded from paragraph (1)(a) above if the Authority becomes the lessee by virtue of article 5 of the Police Act 1997 (Commencement No. 5 and Transitional Provisions) Order 1998(1).