Capital Finance

November 27th, 2018

The Local Authorities (Capital Finance and Accounting) (England) (Amendment) Regulations 2018, SI 2018/1207 amend the Local Authorities (Capital Finance and Accounting) (England) Regulations 2003 (the “2003 Regulations”). Regulation 3 amends regulation 23 of the 2003 Regulations in order to allow a local authority to use capital receipts to make a payment to an employee or officer under new regulation 30AA. Regulation 4 inserts a new regulation 30AA into the 2003 Regulations.

New regulation 30AA provides that a local authority need not charge to a revenue account an amount in respect of a payment to be made to an officer or employee (“E”) for work done for which E received unequal pay (where men and women were paid different amounts for similar work despite being entitled to the same amounts by virtue of section 66 of the Equality Act 2010), until the authority pays that amount to E.

Regulation 5 inserts a new regulation 30K into the 2003 Regulations. New regulation 30K provides that a local authority must not charge an amount to its revenue account to reflect any fluctuation in the fair value of a local authority’s investment in a pooled investment fund. Instead, such amounts must be recorded in a separate account established and usable solely for that purpose. The fair value of a local authority investment in a pooled investment fund is determined in accordance with the proper accounting practices which local authorities must follow by virtue of regulation 31 of the 2003 Regulations. This accounting treatment is not to apply to the recognition of an impairment loss to such an investment as recognised under those proper accounting practices, or to any disposal of such an investment, including a sale. It is also not applicable to investments made by a local authority in its capacity as the administering authority of a local government pension fund. Regulation 30K will apply to accounts prepared for financial years in respect of the period beginning with 1st April 2018 and ending with 31st March 2023.

 

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