PRIVATE FINANCE AND LOCAL-GOVERNMENT

For many years local authorities have used the device of a wholly-owned or partly-owned company to further their policies and objectives. Sometimes, for example where economic development is the main purpose, the formation of a company has been helpful in arranging partnerships with the private sector. Other benefits, such as a more commercially-oriented management, may also be tapped. Government’s attitude, however, has tended to be increasingly restrictive, notably in the passage of the Local Government and Housing Act 1989, which debarred local authorities from holding a majority share in any company. In a recent case (Credit Suisse and the Borough cif Allerdale, 6 May 1994), the High Court administered a further blow—this time striking at the financial insiitutions which might become involved with financi ng local authority companies © 1994 Taylor & Francis Group, LLC.