LOCAL GOVERNMENT, ENGLAND AND WALES Commencement and citation 1 This Order may be cited as the Local Authorities (Companies) (Amendment) Order 1996 and shall come into force on 30th March 1996. Amendment of Order 2 The Local Authorities (Companies) Order 1995 shall be amended in accordance with the provisions of articles 3, 4 and 5 below. Interpretation 3 In article 12, insert the following at the end of paragraph (2)— “relevant lender” means the Public Works Loan Board, the Bank of England, the European Investment Bank, a body mentioned in any of paragraphs 1 to 17, or in paragraph 28 or 29, of Part II of the Schedule to the Local Authorities (Capital Finance) (Approved Investments) Regulations 1990 , an authorised institution within the meaning of the Banking Act 1987 or a building society within the meaning of the Building Societies Act 1986 . . Application of Part IV: requirement for credit cover 4 In article 14, for paragraph (3) substitute the following paragraph— 3 This paragraph applies to a local authority whose credit ceiling, as determined under Part III of Schedule 3 to the Act, is nil or a negative amount at the beginning of the current year, and who have no money outstanding by way of borrowing other than— a short-term borrowing (within the meaning of section 45(6)); b borrowing undertaken under section 5 of the City of London (Various Powers) Act 1924 ; or c borrowing undertaken before 24th August 1995, other than borrowing by the issue of stock on or after 15th December 1993, from a person who is not a relevant lender. . Liabilities of regulated companies 5 In article 16— a in paragraph (1), insert at the beginning the words “Subject to paragraph (6),”, omit the words “subject to paragraph (7)”, and after sub-paragraph (b) insert the following sub-paragraph— bb the company’s current assets shall be treated as if they are not reduced by the defraying, after the relevant date, of expenditure which, if the company were a local authority, would be expenditure for capital purposes (“capital expenditure”); provided that the total amount by which they may be treated as not reduced by such expenditure shall not exceed the amount shown in the company’s accounts on the relevant date as— i being available for capital expenditure, and ii having been reserved for that purpose out of income which, if received by the authority, would have been revenue of the authority; ; b for paragraph (5) substitute the following paragraphs— 5 In a financial year other than the last year, the relevant authority shall determine the relevant liabilities of a regulated company by reference to— a amounts shown for assets and liabilities in the company’s balance sheet prepared as at a date in that year, or, if there is more than one such balance sheet, in the last such balance sheet to have been prepared, or, if there is no such balance sheet, b amounts which they determine to be assets and liabilities of the company on the last day of that year. 5A In the last year, the relevant authority shall determine the relevant liabilities of a regulated company by reference to amounts which they determine to be assets and liabilities of the company on the day immediately before the day on which the company ceases to be a member of the same local authority group. 5B In paragraphs (5A) and (5B) above, “the last year” means the financial year in which the company concerned ceases to be a regulated company or becomes a regulated company of a different local authority. ; c in paragraph (6), for the words “the aggregate of the amounts determined” substitute “the amount determined”; and d for paragraph (7) substitute the following paragraphs— 7 The relevant authority shall determine the amount by which the total of the company’s liabilities as at the date immediately before the day on which the company became a regulated company exceeded the company’s current assets as at that date (and the total so calculated may, accordingly, be a negative amount); and for this purpose— a “current assets” shall be construed in accordance with section 262(1) of the 1985 Act, but do not include land in which the company had any interest on that date; and b the sum of the called-up share capital of the company with respect to shares held on that date by persons who were not, on the following day, members of the same local authority group, and any premium paid to the company for such shares, is to be treated as a liability of the company. . Signed by authority of the Secretary of State for the Environment David Curry Minister of State, Department of the Environment 5th March 1996 Signed by authority of the Secretary of State for Wales Gwilym Jones Parliamentary Under-Secretary of State, Welsh Office 6th March 1996