The Local Authorities (Companies) Order 1995

Requirements applicable to regulated companies

5.—(1) A regulated company shall not—

(a)in respect of the carrying out of any relevant duty, pay to a regulated director remuneration in excess of the maximum amount;

(b)in respect of expenditure on travelling or subsistence in connection with the carrying out of a relevant duty, pay to a regulated director an allowance, or reimburse expenses, in excess of the maximum amount;

(c)publish any material which the relevant authority would be prohibited from publishing by section 2 of the Local Government Act 1986(1).

(2) Where a director becomes disqualified for membership of a local authority otherwise than by being employed by a local authority or a controlled company, the company shall make such arrangements as may be necessary for a resolution to be moved for his removal in accordance with section 303 of the 1985 Act.

(3) In this article—

(a)for the purposes of paragraph (1)(a), the maximum amount is the greatest amount which would for the time being be payable by the relevant authority in respect of a comparable duty performed on behalf of that authority, less any amount paid by that authority in respect of the relevant duty to the regulated director in question;

(b)for the purposes of paragraph (1)(b), the maximum amount in relation to a director is the maximum amount of travelling or subsistence allowance which would for the time being be payable to that director by the local authority of which he is a member if the relevant duty were an approved duty for the purposes of section 174 of the Local Government Act 1972(2);

(c)“regulated director” means a director of the company who is also a member of a relevant authority; and

(d)“relevant duty” means a duty carried out on behalf of the company.