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Section 12B: Risk thresholds

Local Government Act 2003 · 2003 c. 26View on legislation.gov.uk

Part 1: Capital finance etc and accounts — Chapter 1: Capital finance etc

For the purposes of section 12A(2)(a), a risk threshold is breached by a local authority in England if (and when) a capital risk metric for the local authority breaches the specified threshold for that metric.

Each of the following is a "capital risk metric"—

the total of a local authority's debt (including credit arrangements) as compared to the financial resources at the disposal of the authority;
the proportion of the total of a local authority's capital assets which is investments made, or held, wholly or mainly in order to generate financial return;
the proportion of the total of a local authority's debt (including credit arrangements) in relation to which the counter-party is not central government or a local authority;
the amount of minimum revenue provision charged by a local authority to a revenue account for a financial year;
any other metric specified by regulations made by the Secretary of State.

The Secretary of State may, by regulations, make further provision—

specifying whether the specified threshold for a particular metric is breached by a failure to reach that threshold or by that threshold being exceeded;
about how the metrics specified in, or under, subsection (2) are to be calculated for the purpose of determining whether the specified threshold for that metric has been breached.

Before making regulations under subsection (2)(e), the Secretary of State must consult all local authorities in England.

In this section—

  • "capital asset" has the meaning given by section 9;

  • "minimum revenue provision" has the meaning given by regulation 27 of the Local Authorities (Capital Finance and Accounting)(England) Regulations 2003 (S.I. 2003/3146);

  • "specified" means specified, or determined in a manner specified, in regulations made by the Secretary of State.

Regulations may require a specified threshold to be determined having regard to guidance issued under section 21(1A) (accounting practices).

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This legislation text comes from legislation.gov.uk. Contains public sector information licensed under the Open Government Licence v3.0. These source and reuse terms cover the legislation text, not Remedy's commentary.

Reuse reviewed 21 August 2026 under Open Government Licence v3.0.