delete COMPANIES NOT SUBJECT TO THE ORDER
The Local Authorities (Companies) Order 1995 implements Part V of the Local Government and Housing Act 1989, regulating companies controlled by or subject to local authority influence ('regulated companies'). It imposes director remuneration caps tied to equivalent local authority rates, requires disclosure of local authority control on business documents, mandates information sharing with auditors and the Audit Commission, and—most significantly—treats regulated company transactions (capital receipts, credit transactions, liability changes) as if they were done by the relevant local authority for purposes of capital finance controls and credit ceiling calculations under Part IV.
This Order represents the bureaucratic extension of local authority capital controls to private companies, distorting market allocation and creating perverse incentives. The core mechanism—treating company transactions as local authority transactions for credit ceiling purposes—prevents efficient capital deployment and discourages investment in public services through company structures. The complex 'relevant liabilities' calculations, credit cover requirements, and the treatment of companies as pseudo-public entities for capital finance purposes inhibit legitimate commercial activity and drive business structures toward less efficient arrangements. Ninety-nine years after the repeal of the Corn Laws, this regulation exemplifies the interventionist logic that Adam Smith and the classical economists warned against: privileging political control over market signals, adding compliance costs without corresponding benefit, and creating barriers to the dynamic commercial relationships a free-trading Britain should encourage.