(1)If the Commission considers at any time—
(a)that the discharge by a local authority of relevant functions fails to satisfy the regulatory requirements; and
(b)that the failure is substantial,
it shall report that fact to the Secretary of State.
(2)Subsections (3) and (4) apply in relation to a local authority where—
(a)a person authorised by the Commission has exercised in relation to the authority any power conferred by section 45(1)(b); or
(b)the Commission has given the authority a notice under subsection (5) and the time specified (in accordance with paragraph (b) of that subsection) in the notice has expired.
(3)If the Commission considers that the discharge by the authority of relevant functions satisfies the regulatory requirements, it shall report that fact to the Secretary of State.
(4)If the Commission considers that the discharge by the authority of relevant functions fails to satisfy the regulatory requirements, but that the failure is not substantial, the Commission shall—
(a)report that fact to the Secretary of State; or
(b)if it considers that it is not appropriate to make a report under paragraph (a), give the authority a notice under subsection (5) and inform the Secretary of State that it has done so.
(5)A notice under this subsection is a notice which—
(a)specifies the respects in which the Commission considers that the discharge by the authority of relevant functions fails to satisfy the regulatory requirements and any action which the Commission considers the authority should take to remedy the failure; and
(b)specifies the time by which the failure should be remedied.
(6)Where the Commission has made a report to the Secretary of State under subsection (1) or (4)(a), the powers conferred by section 45(1) shall not be exercisable in relation to the authority concerned at any time unless the Secretary of State has notified the Commission that this subsection has ceased to apply.