Commentary on provisions of Act Combined authorities Section 5: Financial matters
Section 5 amends sections 39 and 40 of the Local Government Finance Act 1992 ("the 1992 Act") to include a mayoral combined authority as a major precepting authority, and enables a precept to be set in relation to funding of the mayoral functions. It also inserts a new section 107G in the 2009 Act which enables the Secretary of State to make provision for the costs of a mayor for the area of a combined authority that are incurred in, or in connection with, the exercise of mayoral functions to be met by precepts issued by the combined authority under section 40 of the 1992 Act.
	Subsection (2) of new section 107G provides that only the mayor, acting on behalf of the combined authority, may issue precepts for mayoral functions. Where a mayor takes on functions of a Police and Crime Commissioner, subsection (4) of the new section 107G provides that the precept is required to have two components: one for the mayor's PCC functions and one for their general functions. Calculating the PCC component of the precept will be a PCC function exercisable only by the mayor.
	Subsection (5) of new section 107G provides that the Secretary of State may by order make provision (a) requiring the mayor to maintain a fund in relation to receipts arising and liabilities incurred, in the exercise of the mayor's functions, and (b) about the preparation of an annual mayoral budget. Subsection (6) provides that an order about the preparation of a mayoral budget may in particular make provision for (a) the mayor to prepare a draft budget, (b) the scrutiny of the draft budget, (c) the making of changes to the budget following scrutiny, (d) the approval of the draft by the mayoral combined authority, and (e) the basis on which such approval is to be given.