Further Education Act 1985

2 Powers of local education authorities. E+W

(1) A local education authority shall have power—

(a) to enter into an agreement for the supply of goods or services or both through [F1 an institution which is maintained by them and provides higher education or further education (or both)];

(b) to lend money for the purposes of such an agreement to a body corporate in which they have a holding such as is mentioned in subsection (8) below.

(2) A local education authority shall also have power to lend money—

[F2 (a) to a corporation established under section 121 or 122 of the Education Reform Act 1988;

(b) to a company responsible for conducting an institution which—

(i) provides higher education or further education (or both); and

(ii) is either within the PCFC funding sector or is assisted by a local education authority;

(c) where such an institution as is mentioned in paragraph (b) above is not conducted by a company, to the governing body of the institution; or

(d) to a body corporate in which such a corporation or company as is mentioned in paragraph (a) or (b) above has a holding such as is mentioned in subsection (8) below,]

if the loan is for the purposes of an agreement for the supply of goods or services or both through the [F3 institution conducted by the corporation, company or governing body].

(3) Subject to the following provisions of this section, a local education authority shall not under an agreement under subsection (1)(a) above supply goods or services for less than their open market value.

(4) Subsection (3) above does not apply to the supply of goods or services where the goods are produced, or the goods or services are supplied, in the normal course of any of the educational activities mentioned in section 1(3)(a) above, or where the supply is—

(a) for a body which is a Research Council for the purposes of the M1 Science and Technology Act 1965; or

(b) for a body specified in an order under subsection (5) below.

(5) The Secretary of State may by order made by statutory instrument provide that any person who is specified in the order or is of a description so specified, being a person or description of persons appearing to the Secretary of State to be exercising functions of a public nature, shall be a public body for the purposes of this Act; and any statutory instrument made by virtue of this subsection shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(6) An order under subsection (5) above may contain such provisions as the Secretary of State considers appropriate—

(a) for restricting the application of subsection (4)(b) above to agreements of a description specified in the order;

(b) without prejudice to paragraph (a) above, for securing the inclusion of terms imposing restrictions in any agreement to which subsection (4)(b) above applies and which is made by a body to which the order applies.

(7) For the purposes of this Act the open market value of goods or services shall be taken to be the amount of the consideration in money that would be payable for the supply by a person standing in no such relationship with any person as would affect that consideration.

(8) The holding referred to in subsections (1)(b) [F4 and (2)(d)]above is a holding of not less than 20 per cent. of the issued shares comprised in the share capital of the body corporate and carrying rights to vote in all circumstances at general meetings of the body corporate.

(9) Money may be lent under this section for the purposes of an agreement either before the agreement is made or during its currency.

(10) Nothing in this section shall be construed as derogating from any powers exercisable by a local education authority apart from this section.

Textual Amendments

F1 Words substituted by Education Reform Act 1988 (c. 40, SIF 41:1), ss. 231(7), 235(6), 237(1), Sch. 12 para. 93(2)

F2 S. 2(2)(a)(b)(c)(d) substituted by Education Reform Act 1988 (c. 40, SIF 41:1), ss. 231(7), 235(6), 237(1), Sch. 12 para. 93(3)

F3 Words substituted by Education Reform Act 1988 (c. 40, SIF 41:1), ss. 231(7), 235(6), 237(1), Sch. 12 para. 93(4)

F4 Words substituted by Education Reform Act 1988 (c. 40, SIF 41:1), ss. 237(1), Sch. 12 para. 93(5)

Marginal Citations

M1 1965 c. 4.