LOCAL GOVERNMENT, ENGLAND AND WALES Citation and commencement 1 This Order may be cited as the Local Government Reorganisation (Debt Administration) (Merseyside) Order 1988 and shall come into force on 1st April 1988. Interpretation 2 In this Order— “ the Act ” means the Local Government Act 1985; “the 1986 Order ” means the Local Government Reorganisation (Repayment of Loans) (Merseyside) Order 1986 ; “deemed borrowing” means the sum which, in accordance with article 6 of this Order, a relevant authority is deemed to have borrowed from the designated council; “designated council” means the Council of the Metropolitan Borough of Wirral; “early repayment” means, as appropriate, a repayment under article 11(1) of this Order or a discharge under article 11(2); “the fund” means the metropolitan debt administration fund which the designated council is required to establish by article 7 of this Order; “the Mersey Tunnels Account” means the account maintained by the Transport Authority in accordance with section 100 of the County of Merseyside Act 1980 ; “relevant authority” means any body mentioned in Schedule 1 other than the designated council; “repayment period” means the period of 38 years specified in article 8 of this Order; “ Residuary Body ” means the Merseyside Residuary Body; “the transfer date” means 1st April 1988; “the Transport Authority” means the Merseyside Passenger Transport Authority; “the Tunnel loans” means the money borrowed from the Secretary of State for the Environment under the Mersey Tunnel Acts 1925 to 1972 for the purposes of any road crossing under the river Mersey. Rights and liabilities in respect of loans 3 1 The rights and liabilities of the former Merseyside Metropolitan County Council in respect of money borrowed which on the abolition date became rights and liabilities of the Residuary Body by virtue of section 58(1) of the Act shall, to the extent that they subsist immediately before the transfer date, become on that date rights and liabilities of the designated council or, if they relate to the Tunnel loans, rights and liabilities of the Transport Authority. 2 The rights and liabilities of the Residuary Body in respect of money borrowed by that Body shall, to the extent that they subsist immediately before the transfer date, become on that date rights and liabilities of the designated council. 3 The liabilities (both as respects principal and interest) which fall to be discharged by the designated council in consequence of paragraphs (1) and (2) shall be charged indifferently on all the revenues of that council. 4 The liabilities (both as respects principal and interest) which fall to be discharged by the Transport Authority in consequence of paragraph (1) shall be charged indifferently on all the revenues of the Authority. Transfer of entitlement to grant 4 Any entitlement of the Residuary Body to the receipt of grant from the Exchequer under section 1 of the Local Government Grants (Social Need) Act 1969 shall on the transfer date become an entitlement of the designated council or, if it relates to expenditure for the purposes of Liverpool Airport, an entitlement of the Transport Authority. The Mersey Tunnels Account 5 1 Notwithstanding the requirements as to the operation of the Mersey Tunnels Account, the amount of the liabilities mentioned in article 3(4) shall be debited to that account. 2 Without prejudice to section 99 of the County of Merseyside Act 1980, the Transport Authority may apply money from its general fund for the purposes of paying interest on or repaying or redeeming debt connected with the Tunnel loans. Amount of deemed borrowing and designated council’s transferred debt 6 1 For the purpose of providing the designated council with revenues to discharge the liabilities specified in article 3(1) and (2), each relevant authority shall be deemed to have borrowed from that council on the transfer date the sum specified in Schedule 1 to this Order in relation to the authority in question, being a sum which reflects the obligations of that authority to the Residuary Body by virtue of the 1986 Order which are extinguished by this Order. 2 In the case of the designated council the sum so specified, being a sum which reflects that council’s obligations to the Residuary Body by virtue of the 1986 Order, which are extinguished by this Order, is hereinafter referred to as its transferred debt. The metropolitan debt administration fund 7 1 The designated council shall on the transfer date establish and thereafter operate a loans fund which shall be called “the metropolitan debt administration fund”. 2 The fund shall be used for— a defraying any expenditure which falls to be met by the designated council by virtue of this Order; and b the repayment or redemption of debt connected with the liabilities which fall to be discharged by that council by virtue of article 3(1) and (2). 3 For the purposes of paragraph (2)(a), “expenditure” includes the administrative expenses of the designated council which are properly incurred in the performance of the duties which are imposed on it by this Order. Repayment of principal 8 1 Subject to article 11 (early repayment), a relevant authority shall discharge its liability to the designated council in respect of its deemed borrowing by making repayments of principal to that council over a repayment period of 38 years commencing with the financial year beginning 1st April 1988. 2 The amount of principal which is to be repaid by a relevant authority in each financial year of the repayment period is 1/38th of the amount of its deemed borrowing. 3 The designated council shall pay into the fund— a all repayments of principal which it has received under paragraph (1); b amounts equal to the repayments of principal which it would be required to make if it were a relevant authority and its transferred debt were its deemed borrowing; and c any grant received from the Exchequer by virtue of article 4. Payment of interest 9 1 Subject to article 11 (early repayment), in each financial year a relevant authority shall make payments to the designated council in respect of interest on its deemed borrowing in accordance with the formula specified in Schedule 2; and the designated council shall credit the fund with the amounts so paid. 2 The designated council shall in each financial year pay into the fund an amount calculated in accordance with the formula specified in Schedule 2 by way of notional interest in respect of its transferred debt. Administrative arrangements 10 1 On or before 31st December in each year the designated council shall notify each relevant authority of its estimate of the amount to be paid by that authority in accordance with article 9(1) in respect of the next financial year; and on or before 30th June 1988 of the amount to be so paid in respect of the financial year ending 31st March 1989. 2 On 30th September and 31st March in each year each relevant authority shall pay to the designated council one half of the amount referred to in article 8(2) and one half of the amount notified to the authority as the council’s estimate of the amount payable in accordance with article 9(1) in respect of that year. 3 On or before 30th June in each year commencing with the financial year beginning 1st April 1989 the designated council shall notify each relevant authority of the actual amount payable by that authority in accordance with article 9(1) in respect of the preceding financial year. Any difference between that amount and the amounts paid by the authority in respect of interest for that year in accordance with paragraph (2) above shall be paid by the authority to the council or, as the case may be, by the council to the authority, on 30th September. 4 The designated council when estimating interest payments for the purposes of paragraph (1) above shall also estimate the amount payable by it for the relevant year in accordance with article 9(2); and shall on 30th September and 31st March in each year pay into the fund one half of the amount payable in respect of that year by virtue of article 8(3)(b) and one half of the amount estimated to be payable in accordance with article 9(2) in respect of that year. 5 Where the estimated amount paid in accordance with paragraph (4) differs from the amount actually due for the financial year in question under article 9(2), the designated council shall on 30th September following the end of that year make an appropriate payment into (or withdrawal from) the fund. Early repayment 11 1 A relevant authority may, after giving to the designated council at least 60 days' notice in writing of its intention to do so— a repay the whole of the principal sum outstanding in respect of its deemed borrowing; or b on the 31st March in any year, repay any part of that sum. 2 The designated council may at any time discharge the whole of the balance of its transferred debt or may, on the 31st March in any year, discharge any part of that balance. 3 Where a relevant authority makes an early repayment under paragraph (1)(b), the amount of future repayments of principal shall be calculated by dividing the amount of its deemed borrowing which remains unpaid at the end of the day on which the early repayment was made by a figure which represents the number of years after that day until the end of the repayment period. 4 Where a relevant authority makes an early repayment under paragraph (1)(a) before 31st March in any financial year, the amount of interest to be paid in respect of that year shall be the relevant proportion of the amount that would otherwise have been payable in accordance with article 9(1). 5 Where the designated council makes an early repayment of part of the balance of its transferred debt, paragraph (3) above shall apply as if it referred to the designated council, to repayments under paragraph (2) above and to future payments under article 8(3)(b). Where the designated council makes an early repayment of the whole of the balance of its transferred debt before 31st March in any financial year, paragraph (4) above shall apply as if it referred to the designated council, to a repayment under paragraph (2) above and to amounts payable by virtue of article 9(2). 6 For the purposes of paragraph (4), the relevant proportion is the same proportion as that which the number of days in the period beginning with the first day of the financial year in which the early repayment is made and ending with the day on which that repayment is made bears to the number of days in the financial year. Power to borrow 12 1 Without prejudice to its other borrowing powers, the designated council may borrow money for the purpose of discharging the part of its liabilities under article 3(1) and (2) of this Order which consists in the repayment of principal. 2 Paragraph 8 of Schedule 13 to the Local Government Act 1972 (power to borrow during the fixed period for repaying loans) shall apply in relation to money borrowed under paragraph (1) as if that money were borrowed under paragraph 1(b) of that Schedule and as if the fixed period were a period of 38 years commencing with 1st April 1988. Revocation and savings 13 1 Subject to paragraph (2), the 1986 Order is revoked. 2 Article 6(5) of the 1986 Order (end-year settlements) shall continue to have effect until 1st October 1988. Nicholas Ridley Secretary of State for the Environment 10th March 1988