The Local Authorities (Direct Labour Organisations) (Competition) (Wales) Regulations 1997

Explanatory Note

(This note is not part of the Regulations)

Part III of the Local Government, Planning and Land Act 1980 (“the 1980 Act”) requires local authorities (including authorities who are treated as local authorities for this purpose) and development bodies, before undertaking construction or maintenance work through their direct labour organisations (DLOs), to have satisfied certain requirements as respect competitive tendering.

The Regulations apply only to local authorities in Wales, namely, county councils, county borough councils, police authorities, National Park authorities and joint committees of such authorities (regulation 3). They replace the Local Government, Planning and Land Act 1980 (Competition) (Wales) Regulations 1994 (S.I. 1994/338) (“the 1994 Regulations”) as from 1st October 1997. The 1994 Regulations had themselves replaced the Local Government (Direct Labour Organisations) (Competition) Regulations 1989 (“the 1989 Regulations”) (S.I. 1989/1588) in so far as those regulations applied to local authorities in Wales. That was in consequence of the additional administrative work which local government reorganisation in Wales placed upon Welsh local authorities. The provisions applied to local authorities in Wales by the present Regulations apply (with some modifications) the same provisions that had applied to Welsh local authorities under the 1989 Regulations.

Section 7(1) of the 1980 Act provides that a local authority may not enter into a works contract whose value exceeds the prescribed amount unless they do so as the result of acceptance of a tender. The Regulations prescribe different amounts in relation to different descriptions of contract namely, £25,000 in respect of general highway works; £50,000 in respect of the construction and maintenance of sewers and works of new construction and £10,000 in respect of works of maintenance (regulation 4).

For the purpose of regulation 4 certain works contracts are to be treated as a single contract (regulation 5).

Section 7(1) of the 1980 Act also provides that a local authority may not enter into a works contract whose value is equal to or less than the prescribed amount unless they have complied with conditions to be prescribed by regulations. This is provided for in regulations 6 and 7. They apply in relation to certain general highway works where the value of the jobs does not exceed £25,000; to works of new construction not exceeding £50,000 and works of maintenance not exceeding £10,000.

The Regulations also specify certain descriptions of works contracts to which the restrictions in section 7(1) of the Act do not apply (regulation 8). The descriptions of works contracts are emergency work (defined in regulation 2); gritting of and clearing of snow from highways and certain further contracts.

In relation to functional work, the Regulations specify descriptions of work which an authority may not undertake unless they have first complied with the conditions specified in section 9(4) of the Act (regulation 9) namely all general highway works (except certain jobs not exceeding £25,000); the construction or maintenance of a sewer where the estimated cost of the job exceeds £50,000; works of new construction and works of maintenance.

The Regulations also specify descriptions of functional work which may be undertaken by a local authority without having first to comply with the conditions specified in section 9(4) of the Act (regulation 10). These correspond to the descriptions of works contracts in regulation 8 save that, additionally, work undertaken for the purposes of a Crown Court is exempt.

The Regulations also lay down conditions with which authorities must comply before carrying out functional work consisting of certain highway jobs not exceeding £25,000 and the gritting of and clearing of snow from highways where that functional work is to be done by their DLO (regulation 11).

Regulation 12 disapplies the 1994 Regulations in relation to works contracts and functional work to which the present Regulations apply.