Citation, commencement and application

1. —(1) This Order may be cited as the Local Government (Best Value Authorities) (Power to Trade) (England) Order 2004 and shall come into force on 29th July 2004.

(2) Subject to paragraph (3), this Order applies to best value authorities in England( 2 ) which—

(a) are local authorities within the meaning of section 1(2) of the Local Government Act 1999( 3 ); and

(b) by virtue of such order as may from time to time be made by the Secretary of State under section 99(4) of the Local Government Act 2003, are within one of the following categories—

(i) “excellent”;

(ii) “good”; or

(iii) “fair”.

(3) This Order does not apply to a best value authority that is—

(a) a non-metropolitan county council;

(b) a non-metropolitan district council for an area for which there is no county council; or

(c) the Council of the Isles of Scilly.

when acting in its capacity as a fire authority.

Power to trade in function-related activities

2. —(1) Subject to paragraphs (2) and (3), a best value authority is authorised to do for a commercial purpose anything which it is authorised to do for the purpose of carrying on any of its ordinary functions( 4 ).

(2) Before exercising the power conferred by paragraph (1), the authority shall—

(a) prepare a business case in support of the proposed exercise of that power; and

(b) approve that business case.

(3) A best value authority shall recover the costs of any accommodation, goods, services, staff or any other thing that it supplies to a company( 5 ) in pursuance of any agreement or arrangement to facilitate the exercise of the power conferred by paragraph (1).

(4) In this article, “business case” means a comprehensive statement as to—

(a) the objectives of the business,

(b) the investment and other resources required to achieve those objectives,

(c) any risks the business might face and how significant these risks are, and

(d) the expected financial results of the business, together with any other relevant outcomes that the business is expected to achieve.

Transitional arrangements

3. Where a best value authority ceases to be within one of the categories specified in article 1(2)(b)—

(a) anything which the authority is in the process of doing by virtue of article 2, at the time this Order ceases to apply to it, may be completed; and

(b) any agreement or arrangement entered into for the purpose of facilitating the exercise of the power conferred by article 2(1), shall cease to have effect at the end of the period of two years beginning with the date on which this Order ceases to apply to the authority.