156.Section 82 provides that the GLA will be a major precepting authority, that is an authority which does not raise council tax directly from individual council tax payers. Instead the GLA will require each London borough council to raise a certain amount (the "precept") from council tax payers in its area. The Act defines the GLA as a major precepting authority by amending the Local Government Finance Act 1992, and removes the London Fire and Civil Defence Authority and the Receiver for the Metropolitan Police District from the list of major precepting authorities. Section 81 requires billing authorities to add to their council tax bills the amounts calculated by the GLA under the GLA Act 1999. Section 83 amends section 40 of the Local Government Finance Act 1992 so that where the GLA issues a precept the calculations and taxbase items referred to are as set out in the GLA Act.
157.Section 84 amends section 42 of the Local Government Finance Act 1992 to require the GLA to follow the procedure under that section whenever it issues a substitute precept, including a substitute precept following a direction to increase the budget for the Metropolitan Police Authority under section 95. A substitute precept is a precept issued by a local authority to give effect to substitute calculations of budget requirements or basic amounts of council tax carried out by the authority in respect of a particular financial year.
158.Sections 85 and 86 set out how the GLA will calculate its component and consolidated annual budget requirements. For each constituent body, that is the Authority and each of the four functional bodies, the Authority must calculate the budget requirement. The GLA must then calculate the consolidated budget requirement by adding together the budget requirements of each of the constituent bodies. The budget requirement of a constituent body is calculated in a similar way to that of local authorities by calculating the difference between the sum of expenditure items and the sum of income items as defined in the Act. A budget requirement cannot be negative; if the sum of expenditure items is less than the sum of income items, it will be nil.
159.The Act sets out rules which the GLA must follow in calculating budget requirements. An amount of income or expenditure which has been included in the calculation of a budget requirement of one constituent body should not be included in the calculation of the budget requirement of another. In estimating the Metropolitan Police Authority's expenditure, the GLA should take into account levies from the National Criminal Intelligence Service and the National Crime Squad.  In estimating the expenditure of the other bodies, levies issued to them shall be taken into account.  The GLA shall not anticipate any levies which have not been issued, unless an order or regulations have been made allowing it to do so.
160.The Secretary of State will be able to amend the rules governing the calculations by statutory instrument, in the same way as for the equivalent rules for local authorities generally.
161.Section 87 and Schedule 6 establish the roles of the Mayor and Assembly in deciding budget requirements for the GLA itself and each of the functional bodies ("component budgets") and the consolidated budget requirement. The functional bodies will also be consulted about their own budgets.
162.The GLA's budget must be finalised by the end of February each year.
163.The first stage is for the Mayor, having consulted the Assembly and the functional bodies about their relevant component budgets, to draw up a draft (consolidated) budget.  The Mayor will then consult the Assembly about the draft budget before presenting it to the Assembly at a public meeting on or before 1 February. The Assembly may approve this draft, or may amend it, both by simple majority vote, before returning it to the Mayor.
164.The Mayor will then prepare a final draft budget and present it to the Assembly at a public meeting before the end of February. If the final draft does not include amendments the Assembly made to the first draft, the Mayor will give reasons. The Assembly will either approve the final draft budget by a simple majority, or may amend it by a two thirds majority.
165.If the Mayor fails to present a draft budget on or before 1 February, or a final draft budget within a reasonable time, the Assembly will decide the GLA's budget by a simple majority.
166.The Secretary of State will be able to change the 1 February date by regulations. The purpose of this power is to accommodate any delay to the Local Government Finance Settlement.
167.The Mayor must publish the consolidated and component budgets and must keep each document available for public inspection at the GLA's offices for six years from the date it is first published.  The Mayor must also supply a copy of all or part of each document to any person, on request, for a reasonable fee.
168.Sections 88 to 93 amend or replace the equivalent sections of the Local Government Finance Act 1992 (sections 44 to 48) which relate to the calculation of precepts.
169.Sections 88 and 89 set out the rules for calculating the basic amounts of council tax for the GLA. The rules for the GLA are broadly similar to those for other precepting authorities. However, in the case of the GLA it is necessary to apportion the various grants which help to meet the GLA's consolidated budget requirement between police services and the other services provided by the GLA.  This division of the various grants between police and non-police services is required because the GLA is responsible for police services in only part of the GLA area, the inner and outer boroughs, but not the City of London, which has its own police force.
170.Council tax payers in the City of London contribute to the cost of police services in the City of London through that part of their council tax which goes directly to the City of London. They are not required to contribute to police services in the remainder of London which will be funded through the GLA, nor should the element of their council tax in respect of GLA services take into account grants from central government to the GLA in respect of the police services funded through the GLA in the rest of London.
171.Sections 88 and 89 provide for this by specifying that the GLA first calculates an amount of council tax for the non-police services which it supplies across the whole of the GLA area. The GLA then calculates an additional amount of council tax in relation to the police services which it funds in the inner and outer boroughs. The calculation for non-police services takes into account that portion of the central government grants which relate to non-police services; the calculation for the additional element of council tax for police services takes into account those grants relating only to police services and that portion of the other grants which relate to police services. Council tax payers in the City of London only pay the GLA the amount for non-police services; council tax payers in the inner and outer London boroughs pay the total of the police and non-police amounts. Sections 88 and 89 also provide powers for the Secretary of State to set rules for the calculation of the police and non-police elements of the GLA basic amounts of council tax.
172.Section 90  identifies “the special item” mentioned in section 89(2). This is the expense of the MPA, the only expense borne by the GLA which does not relate to the whole of Greater London. The expense does not relate to the City of London police area, because that area has its own police force. The Common Council is the police authority for that area and so it, rather than the GLA, is responsible for the cost of the police force.
173.Section 91 amends the Local Government Finance Act 1992 to remove references to police services, and to probation services and magistrates’ courts services in London. These references are no longer required following changes in the provision of these services which will accompany the introduction of the GLA.
174.Sections 92 and 93 cover the calculation of council tax for properties in different council tax valuation bands and the calculation of the amount payable by each billing authority. They do this by amending sections 47 and 48 of the Local Government Finance Act 1992, inserting references to the Greater London Authority, and to the relevant sections of the Greater London Authority Act 1999.
175.Section 94, section 98 and Schedule 7 provide that the GLA will have a similar power to make substitute calculations to that of other local authorities. The effect is that, normally, it will have powers only to reduce its precept, except where the previous calculations are quashed by court proceedings, or where the Secretary of State directs that the Metropolitan Police Authority budget should be increased, in accordance with section 95.
176.The roles of the Mayor and Assembly in carrying out substitute calculations are set out in Schedule 7 and are similar to the procedures for determining the budget originally.
177.Sections 95 and 96 give the Secretary of State a reserve power to set a minimum level for the Metropolitan Police Authority's budget. This power can be used only if the Secretary of State considers that the budget set by the GLA is too small to provide an efficient and effective police force. The Secretary of State may specify a minimum level for the budget, which must not be greater than the amount required to restore or maintain an efficient and effective police force.
178.Where the Secretary of State has made such a direction, the GLA may increase the MPA's budget by increasing the precept, cutting the other component budgets, or through a combination of the two. The GLA will not be able to increase the precept by any more than the difference between the MPA budget specified in the direction and the MPA budget previously set by the GLA and considered by the Secretary of State to be too low.
179.If the GLA chooses to change the precept, the previous precept would remain valid until the new precept is issued. If the GLA fails to make substitute calculations when required to under section 95 and to issue a revised precept within 35 days, it will not receive any sums that billing authorities (the boroughs and the City) would have otherwise paid to it in respect of the precepts until it has carried out the substitute calculations.
180.Section 97 provides that the Mayor will be able to recalculate component budgets when he considers this is appropriate because of an emergency or disaster involving the destruction of or danger to life or property. This will allow him to reallocate income (other than grant allocated to a specific body) between constituent bodies. The GLA will not, however, be able to change the consolidated budget requirement.
Commentary on Sections Part Iii: Financial Provisions Chapter I: Council Tax