The Local Authorities (Contracting Out of Investment Functions) Order 1996

PART IIE+W+SInvestments: contracting out

Interpretation of PartE+W+S

2.  In this Part —

“the 1988 Act” means the Local Government Finance Act 1988;(1)

F1...

“authority” means a local authority or a parish or community council;

“local authority”—

Contracting out of functionsE+W+S

3.  The functions of an authority relating to the investment of money may, to the extent provided for in this Part and subject to the provisions of Part III of this Order, be exercised by, or by the employees of, such person (if any) as may be authorised to exercise them by the authority whose functions they are.

Scope of authorisationE+W+S

4.—(1) In this article —

F2...

“billing authority” has the same meaning as in section 144(2) of the 1988 Act (interpretation: authorities);(2)

“collection fund” means the fund mentioned in section 89(1) of the 1988 Act (collection funds) which a billing authority is required to maintain in accordance with Part VI of that Act (funds);

“prescribed investment” means an investment prescribed in Schedule 3 to the Local Authorities (Funds) (England) Regulations 1992;(3) and

“securities” includes shares, stock and debentures.

(2) [F3Subject to paragraph (2A),] a local authority may authorise a contractor to exercise any functions consisting of, or relating to, the investment F4... of any sum for the time being held by the authority, apart from any sum which —

(a)a contractor may be authorised by a billing authority to invest in a prescribed investment by virtue of paragraph (3) below;

F5(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F6(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F7(2A) The investment referred to in paragraph (2) must be an investment which, if made by the local authority, would be permitted by virtue of section 12 of the Local Government Act 2003 (power to invest).]

(3) A local authority in England which is a billing authority may authorise a contractor to exercise any functions consisting of, or relating to, the investment in a prescribed investment of —

(a)any sum paid into their collection fund which is not immediately required for the purpose of making payments or transfers from that fund; or

(b)any sum which is transferred from their collection fund to their general fund.

(4) [F8Subject to paragraph (4A),] a parish or community council may authorise a contractor to exercise any functions consisting of, or relating to, the investment F9... of any sum for the time being held by the council F9....

[F10(4A) The investment referred to in paragraph (4) must be an investment which, if made by the parish or community council, would be permitted by virtue of section 12 of the Local Government Act 2003 (power to invest).]

Investment functionsE+W+S

5.  For the purposes of article 4, the functions of an authority which consist of, or relate to the investment of any sum (“the investment”) include the functions of —

(a)deciding the manner in which the sum concerned is for the time being to be invested, and the identity of any bank, building society or other person or body with or in whom the investment is to be made;

(b)entering into a contract in the course of making, disposing of, or otherwise dealing with, the investment;

(c)reaching agreement as to the terms and conditions of the investment, including any requirements in relation to any consideration in respect of the investment, or in relation to the repayment or redemption of the investment;

(d)deciding the manner of disposal of the investment, and the time when, and terms and conditions on which, the disposal of the investment is to be undertaken;

(e)deciding, in making any decision relating to the investment, on the need for diversification of all investments made, or to be made, by the authority;

(f)preparing and having custody of any documents relating to the investment; and

(g)making and recording any payments required to be made in making the investment, and receiving and recording sums falling due to the authority under the investment, or on the repayment, redemption or disposal of, the investment.