After section 27A of the 1985 Act there shall be inserted the following section—
(1)This section shall apply if the Secretary of State makes an order under section 2(3) of the [1988 c. 9.] Local Government Act 1988 (“the 1988 Act”) providing for the exercise of any management functions to be a defined activity for the purposes of Part I of that Act (compulsory competitive tendering).
(2)The Secretary of State may by regulations provide that in any case where—
(a)a local housing authority propose to make an invitation to carry out any functional work in accordance with the rules set out in subsection (4) of section 7 of the 1988 Act (functional work: conditions), and
(b)the proposal is such that any decision by the authority that the work should be carried out by the person or one of the persons proposed to be invited would necessarily involve their entering into a management agreement with that person,
the provisions of section 27A shall have effect with such modifications as appear to the Secretary of State to be necessary or expedient.
(3)Nothing in section 6 of the 1988 Act (functional work: restrictions) shall apply in relation to any functional work which, in pursuance of a management agreement, is carried out by the manager as agent of the local housing authority.
(4)In this section “functional work” has the same meaning as in Part I of the 1988 Act.
(5)Regulations under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.”