Part 1

Provision for new legal frameworks
Chapter 3

Powers to form companies etc

Limits on powers conferred by section 11
12
1
The governing body of a maintained school may not exercise any power conferred by any of subsections (1) to (4) of section 11 except—
a
with the consent of the local education authority, and
b
at a time when the school has a delegated budget (within the meaning of Part 2 of the School Standards and Framework Act 1998 (c. 31)).
2
A governing body—
a
may not exercise any of those powers in relation to a company unless the company satisfies any applicable requirements of regulations under subsection (3), and
b
may not, by virtue of section 11, remain a member of a company at any time when the company fails to satisfy any such requirements.
3
Regulations—
a
shall provide that, except in such cases as may be prescribed, the company must be prohibited by its constitution from admitting to its membership any person who is not of a prescribed description, and
b
may impose requirements with respect to—
i
the constitution of the company, and
ii
any other matter connected with the company’s affairs.
4
Without prejudice to the generality of paragraph (b) of subsection (3), regulations under that paragraph may require that the company be prohibited by its constitution from borrowing money, except with the consent of a prescribed person.
5
Regulations shall—
a
provide that where one or more governing bodies have invested in a company by virtue of section 11, a local education authority shall be designated as the supervising authority for the company,
b
specify the persons by whom and the manner in which the power of designation is, or is in specified circumstances, exercisable,
c
make provision about the duties of a local education authority who are for the time being designated as the supervising authority for a company.
6
Regulations may also—
a
require that where a local education authority are for the time being designated as the supervising authority for a company the company shall provide prescribed information relating to its financial affairs to them at such times and in such manner as may be prescribed,
b
provide that in prescribed circumstances a local education authority who are for the time being so designated may direct any participating governing body to cease to be a member of the company or to take any other prescribed action in relation to the company, and
c
prescribe the procedure for making such a direction.
7
In subsection (6)(b) “participating governing body”, in relation to a company, means any governing body of a maintained school who are a member of the company.
8
Regulations may restrict the circumstances in which a local education authority may refuse to give any consent applied for under subsection (1).