Schedule 2, Part 1, paragraph 2

A contract between a contracting authority and a person that is controlled by— the contracting authority, the contracting authority acting jointly with one or more other contracting authorities, another contracting authority, where that authority also controls the contracting authority referred to in paragraph (a), or another contracting authority acting jointly with one or more other contracting authorities, where the authorities acting jointly also control the contracting authority referred to in paragraph (a). A contracting authority, or a contracting authority acting jointly with one or more other contracting authorities, controls a person if— the contracting authority is a parent undertaking, or the contracting authorities are parent undertakings, in relation to the person, no person other than the authority, or authorities, exerts a decisive influence on the activities of the person (either directly or indirectly), more than 80 per cent of the activities carried out by the person are carried out for or on behalf of— the contracting authority or authorities, or another person that is, or other persons that are, controlled by the authority or the authorities acting jointly, and in the case of joint control— each of the contracting authorities is represented on the person’s board, or equivalent decision-making body, and the person does not carry out any activities that are contrary to the interests of one or more of the contracting authorities. A person is not to be regarded as controlled by a contracting authority, or a contracting authority acting jointly with other contracting authorities, if any person that is not a public authority holds shares in the person. In sub-paragraph (2)(a)— “parent undertaking” has the meaning given in section 1162 of the Companies Act 2006, save that an “undertaking” includes any person; “parent undertakings” means two or more contracting authorities acting jointly that would, if they were a single undertaking, be a parent undertaking. For the purposes of sub-paragraph (2)(b), a person does not exercise a decisive influence on the activities of a person only by reason of being a director, officer or manager of the person acting in that capacity. An appropriate authority may by regulations make provision about how a calculation as to the percentage of activities carried out by a person is to be made for the purposes of sub-paragraph (2)(c). For the purposes of sub-paragraph (2)(d)(i), one representative may represent more than one contracting authority. In this paragraph, references to a contracting authority do not include references to a public undertaking or a private utility.

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Source: legislation.gov.uk · retrieved 2026-09-04