For the purposes of this Chapter, a local authority shall be taken to have entered into a credit arrangement where—
it enters into a transaction which gives rise to a liability on its part, and
the liability is a qualifying liability.
A transaction entered into by a local authority is to be taken for the purposes of subsection (1) as giving rise to a liability on the part of the authority if—
it falls in accordance with proper practices to be treated for the purposes of the authority's accounts as giving rise to such a liability, or
it falls in accordance with regulations made by the Secretary of State to be treated as falling within paragraph (a).
The reference in subsection (1)(b) to a qualifying liability is to any liability other than—
a liability to repay money,
a liability in respect of which the date for performance is less than 12 months after the date on which the transaction giving rise to the liability is entered into, and
a liability of a description specified for the purposes of this provision by regulations made by the Secretary of State.