Commentary on Sections Independent Police Complaints Commission Section 141: Financial arrangements for chief officers of police
404.This section amends the 2011 Act insofar as it relates to the financial controls on chief officers of police. It should be read with paragraphs 99 and 100 of Schedule 11 to the Act. Those paragraphs repeal paragraph 7(3) of Schedule 2 and paragraph 4(3) of Schedule 4 to the 2011 Act, which prohibit chief constables and the Metropolitan Police Commissioner respectively from borrowing.
405.Subsection (1) inserts a new paragraph 7A into Schedule 2 to the 2011 Act. New paragraph 7A sets out the circumstances under which a chief constable will be able to borrow. A chief constable will only be able to borrow to cover immediate short term expenditure (it will therefore enable chief constables to have an overdraft facility on their bank account). This borrowing must be in sterling and can only take place with the consent of the relevant Police and Crime Commissioner. New paragraph 7A(2)(b) prohibits chief constables from entering into credit arrangements. New paragraph 7A(3) sets out the circumstances under which a chief constables will be able to invest. A chief constable will only be able to invest for a purpose relevant to his or her functions or for the purpose of prudent financial management, and with the consent of the relevant PCC. New paragraph 7A(4) also applies a number of provisions of Part 1 of the Local Government Act 2003, and any regulations made under them, to chief constables as they apply currently to local authorities. Part 1 of the Local Government Act 2003 sets out the legal framework within which local authorities may undertake capital expenditure and central Government may regulate that activity. The effect of each of the applied provisions is as follows:
	section 6 (protection of lenders): provides that lenders do not need to check whether chief constables have the power to borrow;
	section 7 (meaning of “credit arrangements”): sets out what constitutes a credit arrangement (for the purposes of the prohibition in the new paragraph 7A(2)(b) of Schedule 2 to the 2011 Act);
	sections 9 to 11 (capital receipts): set out what constitutes a capital receipt, how it can be used and areas where the Secretary of State can make regulations. Provisions relating to housing land are not included as they are not relevant to chief constables;
	section 13 (security for money borrowed etc): sets out further conditions around borrowing arrangements for chief constables, including not using property as security against the sum being borrowed;
	section 14 (information): stipulates that chief constables must provide the Secretary of State with any information he or she requires on capital finance etc and accounts;
	section 15 (guidance): stipulates that chief constables shall have regard to guidance and regulations issued by the Secretary of State relating to capital finance etc and accounts;
	section 16 (meaning of “capital expenditure”): defines what constitutes capital expenditure and how the Secretary of State can classify an item of expenditure as being capital expenditure;
	section 17 (external funds); sets out that borrowing by a chief constable for the purposes of an external fund (for example a trust fund) will not be considered to be borrowing in the usual sense;
	section 18 (local authority companies etc): allows the Secretary of State to make regulations applying the other provisions of Part 1 to a company set up by a chief constable;
	section 20 (directions): sets out the conditions under which directions should be given;
	sections 21 and 22 (accounts): sets out that the Secretary of State can make regulations relating to accounting arrangements which would apply to chief constables. This ensures that the statutory accounting framework that applies to Police and Crime Commissioners also applies to chief constables; and
	section 24 (application to Wales): enables Welsh Ministers to make regulations in respect of chief constables in Wales (rather than the Secretary of State).
406.New paragraph 7A(5) provides that regulations made by the Secretary of State under any of the provisions in new paragraph 7A(4) will apply to the chief constable of a police force in England in the same way as they apply to a local authority in England.
407.New paragraph 7A(6) provides that regulations made by Welsh Ministers under any of the provisions in new paragraph 7A(4) will apply to the chief constable of a police force in Wales in the same way as they apply to a local authority in Wales.
408.New paragraph 7A(7) provides that any of the provisions specified in new paragraph 7A(4) (and regulations made under them) also apply, so far as relevant, for the purposes of the borrowing powers conferred and restrictions imposed by new paragraph 7A(1) to (3), as well as for the purposes of Part 1 itself.
409.New paragraph 7A(8) provides that any order made under section 217 or 218 of the Local Government and Public Involvement Health Act 2007 (which relate to entities etc. controlled by local authorities), as far as relevant, should be applied to chief constables.
410.Subsection (2) amends the provisions of the 2011 Act applying to the Metropolitan Police Commissioner by making changes corresponding to those set out in subsection (1) for chief constables.