Subject to the provisions of this section, local highway authorities F8 and strategic highways companies may enter into agreements with F9other such authorities and companies for or in relation to the construction, reconstruction, alteration, improvement or maintenance of a highway for which any party to the agreement are the highway authority.

An agreement under this section may provide, in relation to a highway specified in the agreement, being a highway for which one of the parties to the agreement are the highway authority, that any functions specified in the agreement, being functions exercisable as respects that highway by the highway authority therefor, shall be exercisable by some other party to the agreement on such terms and subject to such conditions (if any) as may be so specified.

Where under an agreement made under this section any function of the highway authority for a highway is exercisable by another highway authority, then, for the purpose of exercising that function that other highway authority shall have the same powers under this Act (including highway land acquisition powers) as the highway authority for the highway have for that purpose, and in exercising that function and those powers they shall have the like rights and be subject to the like liabilities as that authority.

The council of a county F1(other than one in Wales) may not enter into an agreement under this section with the council of another county F2or county borough unless F3their areas adjoin each other F4; and the council of a metropolitan district may not enter into an agreement under this section with the council of another metropolitan district or of a county F5or county borough unless the districts are in the same county or in counties which adjoin each other or, as the case may be, the county in which the district is situated and the other county F6or, as the case may be, county borough adjoin each other..

Expenses incurred in pursuance of an agreement made under this section shall be borne for the parties to the agreement in such proportions as may be determined by the agreement.