Chapter 2: Other Provision Local government capital finance New section 12D: Duty to cooperate with independent expert
Subsection (1) outlines the circumstances in which this section applies, notably, when a trigger event has occurred, no cessation noticed has been issued and the Secretary of State has commenced a review into the local authority’s finances.
	Subsection (2) places a duty on a local authority to comply with an independent expert appointed by the Secretary of State to conduct a review, where it is reasonable for the local authority to do so.
	Subsection (3) defines ‘independent expert’ as someone with expertise, who is neither working for the local authority nor is the Secretary of State. It also further provides consistency for the definition of a trigger event with the definition in 12A.
	Subsections (3) to (8) make consequential changes to the 2003 Act as a result of sections 12A to D.
Example
Following the consideration of data on the total borrowing of a local authority, government decides to request further information from that authority. Government identifies that that authority not only has a borrowing that is 100 times its Service Expenditure but that it owns a number of investment assets. Government identifies that this could cause a significant risk to the local authority’s ability to provide services in the future if there is an economic shock or consumer attitudes change, meaning demand for that commercial asset drastically reduces. Therefore, government engages with the local authority and seeks additional information to identify whether it has any further borrowing and its plans for its commercial assets. Government identifies that that local authority is due to substantially increase its supply of housing in its local area and that it is in an area with high demand and low supply of affordable housing. Government commissions an independent review and identifies that that local authority owns a range of commercial assets, including a cinema, three out-of-town shopping centres and a hotel. Government concludes that the borrowing cap would be inappropriate in this instance and, following advice from the independent reviewer, decides to request the local authority sell its cinema, out-of-town shopping centres and hotel within a time that allows it to meet its best value duty (as determined by the specialist advice on investment by the independent reviewer).