That's my understanding of the Act, yes. Also what I remember from when I was at university (early 80s).
It looks as though it was repealed in 1999, but I don't know if there were other changes before that.
https://www.legislation.gov.uk/ukpga/Eliz2/10-11/12/enacted
1Local education authority awards for first degree university courses and comparable courses in United Kingdom
(1)It shall be the duty of every local education authority, subject to and in accordance with regulations made under this Act, to bestow awards on persons who—
(a)are ordinarily resident in the area of the authority, and
(b)possess the requisite educational qualifications,
in respect of their attendance at courses to which this section applies.
(2)This section shall apply to such full-time courses at universities, colleges or other institutions in Great Britain and Northern Ireland as may for the time being be designated by or under the regulations for the purposes of this section as being first degree courses or comparable to first degree courses; and for the purposes of the preceding subsection the requisite educational qualifications, in relation to any course, shall be such as may be prescribed by or under the regulations, either generally or with respect to that course or a class of courses which includes that course.