Commentary on Sections Contracting Out Section 239: Contracting out
569.The Deregulation and Contracting Out Act 1994 gives the Secretary of State the power to make an order enabling bodies which are local authorities for the purposes of that Act to contract out the functions specified in the order. One such order was made in 1996 to permit the contracting out of investment functions – something which authorities often wish to contract out to private-sector specialists. The Act will bring the definition of “local authority” for the purposes of the Deregulation and Contracting Out Act 1994 broadly in line with the definition of a “local authority” used for the purposes of the “prudential” capital finance system, in Part 1 of the Local Government Act 2003. This will in particular enable a new order which applies to a wider class of bodies to be made on the contracting out of investment functions.