The Local Government (Best Value Authorities) (Power to Trade) (England) Order 2004

Explanatory Note

(This note is not part of the Order)

This Order applies to local authorities in England which, by an order made under section 99(4) of the Local Government Act 2003 (“the Act”), have been categorised on the basis of their performance as “excellent”, “good”, or “fair”. This Order does not apply to the authorities referred to or specified in article 1(3), when acting in their capacity as fire authorities.

Article 2 authorises a local authority to which the Order applies to trade in any of its ordinary functions subject to conditions requiring the prior preparation and approval of a business case, and the recovery of any costs incurred by the authority in anything it supplies, including accommodation, goods, services or staff, to a company through which the trading power is exercised. Under section 95(4) of the Act, the power to trade must be exercised through a company.

Article 3 makes transitional provision. Where a local authority’s performance is re-categorised as below “fair”, this Order will cease to apply to it. However, it will be allowed to complete anything started in exercise of the power to trade. Any agreements or arrangements which have been entered into will be allowed to continue for a period of two years.

A full regulatory impact assessment of the effect that this instrument will have on the costs of business may be accessed at: www.odpm.gov.uk; or available from: ODPM Free Literature, PO Box 236, Wetherby, West Yorkshire, LS23 7NB (tel: [phone]; fax: [phone]); e-mail: [e-mail].