Subject to the provisions of this section, local highway authorities F2, combined authorities, combined county authorities F3 and strategic highways companies may enter into agreements with F4other 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.

If a combined authority or combined county authority is a party to an agreement under subsection (1), the agreement may make or include provision for or in relation to the construction, reconstruction, alteration, improvement or maintenance of a highway for which a constituent council of that authority are the highway authority even if that constituent council is not a party to the agreement (a “relevant constituent council”) (whether that is instead of, or in addition to, such provision about any highway for which a party to the agreement are the highway authority).

A combined authority or combined county authority may not enter into an agreement under this section unless the authority has obtained the consent of any upper-tier constituent council or councils in whose area the authority would exercise functions under the agreement.

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 F6, or a relevant constituent council, 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 F7or a combined authority or combined county authority, then, for the purpose of exercising that function that F8other 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 F9(other than one in Wales) may not enter into an agreement under this section with the council of another county F10or county borough unless F11their areas adjoin each other F12; 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 F13or 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 F14or, as the case may be, county borough adjoin each other..

A combined authority or combined county authority may not enter into an agreement under this section with a council unless their areas 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.