28 Determining whether a contract is a qualifying sub-contract

(1) Single source contract regulations may provide that where—

(a) a primary contractor proposes to enter into a contract with another
person (the “prospective sub-contractor”), and

(b) 5the proposed contract involves the provision by the prospective sub-
contractor of anything for the purposes of a qualifying defence contract
to which the primary contractor is a party,

the primary contractor must assess whether the proposed contract would be a
qualifying sub-contract if it were entered into.

(2) 10The regulations may require the primary contractor—

(a) to keep a record of an assessment made by virtue of subsection (1), for
the purpose of its inclusion in the records which the primary contractor
would be required to keep in relation to the proposed contract, by
virtue of section 22(3)(d) (records relating to whether a contract is a
15qualifying sub-contract), if the contract were entered into;

(b) where the assessment is that the proposed contract would be a
qualifying sub-contract if it were entered into, to give notice in writing
of that fact to the Secretary of State and the prospective sub-contractor.

(3) Single source contract regulations may provide that where—

(a) 20a person (“the prospective primary contractor”) proposes to enter into
a qualifying defence contract with the Secretary of State (“the proposed
qualifying defence contract”),

(b) the prospective primary contractor also proposes to enter into a
contract (“the proposed sub-contract”) with another person (“the
25prospective sub-contractor”), and

(c) the proposed sub-contract involves the provision by the prospective
sub-contractor of anything for the purposes of the proposed qualifying
defence contract,

the prospective primary contractor must assess whether the proposed sub-
30contract would be a qualifying sub-contract if it and the proposed qualifying
defence contract were entered into.

(4) The regulations may require the prospective primary contractor—

(a) to keep a record of an assessment made by virtue of subsection (3), for
the purpose of its inclusion in the records which the prospective
35primary contractor would be required to keep, by virtue of section
22(3)(d), if the proposed contracts were entered into;

(b) where the assessment is that the proposed sub-contract would be a
qualifying sub-contract if it and the proposed qualifying defence
contract were entered into, to give notice in writing of that fact to the
40Secretary of State and the prospective sub-contractor.

(5) Single source contract regulations may contain provision—

(a) in relation to a case where an assessment is made by virtue of
subsection (1), entitling the prospective sub-contractor to appeal to the
SSRO against an assessment that a proposed contract would be a
45qualifying sub-contract if it were entered into;

(b) in relation to a case where an assessment is made by virtue of
subsection (3), entitling the prospective sub-contractor to appeal to the
SSRO against an assessment that the proposed sub-contract would be a
qualifying sub-contract if it and the proposed qualifying defence
50contract were entered into.

(6) The regulations must contain provision about the procedure to be followed by
the SSRO in determining an appeal by virtue of subsection (5).

29 Application of Part to qualifying sub-contracts

(1) This Part and single source contract regulations apply to qualifying sub-
5contracts (and to sub-contractors) as they apply to qualifying defence contracts
(and to primary contractors).

(2) In their application by virtue of subsection (1), this Part and single source
contract regulations are subject to—

(a) such modifications as may be set out in those regulations, and

(b) 10subsection (5).

(3) The regulations—

(a) may provide for the application of this Part and the regulations, by
virtue of subsection (1), to end at a time specified by or determined in
accordance with the regulations;

(b) 15may, in making such provision, provide for determining when this Part
and the regulations cease to apply to a qualifying sub-contract which
is—

(i) partly for the purposes of a qualifying defence contract or
another qualifying sub-contract, and

(ii) 20partly for other purposes.

(4) The provision that may be made under subsection (3)(b) includes provision—

(a) for the sub-contractor to give notice to the SSRO that, in the sub-
contractor’s opinion, this Part and the regulations should cease to
apply to the qualifying sub-contract, and

(b) 25for the SSRO to be able to overrule such a notice (and accordingly for
this Part and the regulations to continue to apply).

(5) The regulations may contain provision excluding the application of this Part
and the regulations, by virtue of subsection (1), to a qualifying sub-contract in
respect of which no notice is given under section 28(2)(b) or (4)(b).

30Compliance

30 Compliance notice

(1) The Secretary of State may give a person a compliance notice if the Secretary of
State thinks—

(a) that the person has contravened this section, and

(b) 35that there are steps that can be taken by the person to remedy the
contravention.

(2) A compliance notice is a notice which—

(a) specifies those steps, and

(b) directs the person to take them.

(3) 40A person (“P”) contravenes this section if—

(a) P fails to comply with one or more specified requirements imposed by
virtue of—

(i) section 22 (duty to keep accounting and other records), or

(ii) section 23 or 24 (reports),

(b) P provides a specified report under section 23 that is misleading in a
material respect and P—

(i) knows that the report is misleading, or

(ii) 5is reckless as to whether the report is misleading,

(c) P fails to comply with the duty under section 26 (duty to notify
Secretary of State of occurrence etc of a relevant event),

(d) in circumstances where P is required to make an assessment under
section 28(1) or (3) in respect of a proposed contract, P fails to make
10such an assessment,

(e) P makes a negative assessment under section 28(1) or (3) in respect of a
proposed contract and the Secretary of State believes that that
assessment is incorrect, or

(f) in circumstances where P is required to give the notice mentioned in
15section 28(2)(b) or (4)(b) in respect of a proposed contract, P fails to give
such a notice.

(4) In subsection (3)—

(a) “specified” means specified in single source contract regulations;

(b) “negative assessment” means an assessment that the proposed contract
20would not be a qualifying sub-contract if it (and, in a case within section
28(3), the proposed qualifying defence contract) were entered into.

(5) A compliance notice must be given before the end of the period specified in
single source contract regulations.

(6) A compliance notice must—

(a) 25give details of the contravention,

(b) specify the period within which the steps specified in the notice must
be taken, and

(c) state that, if P fails to take those steps, the Secretary of State may give P
a penalty notice under section 31.

31 30Penalty notice

(1) The Secretary of State may give a person a penalty notice in the cases set out in
subsections (2) and (3).

(2) The first case is where the Secretary of State thinks that the person—

(a) has failed to take the steps specified in a compliance notice, and

(b) 35does not have a reasonable excuse for the failure.

(3) The second case is where—

(a) the person has contravened section 30, and

(b) the Secretary of State does not think that there are steps that can be
taken by the person to remedy the contravention.

(4) 40A penalty notice is a notice requiring the person to pay a penalty to the
Secretary of State before the end of the period of six months beginning with the
date on which the notice is given.

(5) A penalty notice must be given before the end of the period specified in single
source contract regulations.

(6) 45A penalty notice must—

(a) specify the contravention to which the notice relates,

(b) state the amount of the penalty (as to which, see section 32),

(c) specify the date by which the penalty must be paid (subject to
subsection (8)),

(d) 5specify how the penalty may be paid,

(e) give details of the interest that would be payable by virtue of section
33(2) in relation to any part of the penalty that is unpaid after the date
specified under paragraph (c), and

(f) explain how the person may apply to the SSRO, before the end of the
10period mentioned in subsection (4), for a determination of any of the
matters mentioned in subsection (7).

(7) Those matters are—

(a) whether the person has contravened section 30 or failed to take the
steps specified in a compliance notice (or both);

(b) 15whether the person had a reasonable excuse for contravening section 30
or failing to take the steps specified in a compliance notice (or both);

(c) the amount of the penalty.

(8) Where a person applies to the SSRO for a determination of a matter mentioned
in subsection (7)—

(a) 20the SSRO must determine the matter and the penalty is not payable
until it has done so,

(b) in determining the matter, the SSRO may—

(i) substitute its own decision for any decision of the Secretary of
State (and may vary the amount of the penalty or cancel the
25penalty notice), and

(ii) state the date by which the penalty must be paid (except where
the SSRO cancels the penalty notice), and

(c) the SSRO’s determination is final.

(9) A penalty notice may specify circumstances in which a penalty of a reduced
30amount specified in the notice is payable.

(10) Single source contract regulations may replace the time limit for the time being
specified in subsection (4).

32 Amount of penalty

(1) Where the Secretary of State gives a person a penalty notice in relation to a
35contravention of section 30, the amount of the penalty must not exceed the
amount for the time being specified in relation to the contravention in
regulations made by the Secretary of State.

(2) Subsection (1) does not apply where the Secretary of State gives a person a
penalty notice in relation to a contravention within section 30(3)(b) or (c); and
40in such a case the amount of the penalty is to be calculated as if the
contravention were a breach of contract (and is to be calculated in accordance
with the general law of contract having effect in England and Wales).

(3) In determining the amount of a penalty under section 31, the Secretary of State
must have regard to guidance issued by the SSRO.

(4) 45The SSRO must publish guidance issued under subsection (3) in such manner
as it thinks appropriate.

(5) Subsections (1) to (3) apply in relation to any determination by the SSRO by
virtue of section 31(8)(b) as to the amount of a penalty as they apply to the
Secretary of State.

(6) Regulations under subsection (1) may make different provision for different
5purposes (and may in particular specify penalties of different amounts by
reference to the value of the contract to which the failure relates).

(7) Regulations under subsection (1) are to be made by statutory instrument; and
an instrument containing the regulations may not be made unless a draft of it
has been laid before, and approved by a resolution of, each House of
10Parliament.

33 Enforcement

(1) This section applies where the Secretary of State has given a penalty notice to
a person.

(2) If all or part of the penalty is not paid before the payment date, the unpaid
15balance carries interest from that date at the rate for the time being specified in
section 17 of the Judgments Act 1838.

(3) The “payment date” is the date by which the penalty must be paid, as stated in
the penalty notice.

(4) But where the SSRO, in determining a matter mentioned in section 31(7), states
20a new date by which the penalty must be paid, the “payment date” is that new
date.

(5) The Secretary of State may recover from the person as a debt due to the
Secretary of State the unpaid balance and any unpaid interest.

SSRO: other functions

34 25Opinions and determinations

(1) The SSRO must, on a reference made to it by a person mentioned in subsection
(2)—

(a) give an opinion on a matter relating to a qualifying defence contract or
a proposed qualifying defence contract, where the matter is specified
30for the purposes of this paragraph, or

(b) make a determination in relation to such a matter, where the matter is
specified for the purposes of this paragraph.

“Specified” means specified in single source contract regulations.

(2) The persons referred to in subsection (1) are—

(a) 35the Secretary of State;

(b) an authorised person;

(c) the primary contractor (in the case of a qualifying defence contract);

(d) the person who proposes to enter into the contract with the Secretary of
State (in the case of a proposed contract).

(3) 40The SSRO may give an opinion on any matter relating to—

(a) a qualifying defence contract, on a reference made to it by the Secretary
of State and the primary contractor;

(b) a proposed qualifying defence contract, on a reference made to it by the
Secretary of State and the other proposed party to the contract.

(4) When giving an opinion or making a determination in relation to any matter under or
by virtue of this Part, the SSRO may require the payment of such costs as the SSRO
5considers appropriate—

(a) in the case of a qualifying defence contract, by one party to the contract to the
other, or

(b) in the case of a proposed contract, by one proposed party to the contract to the
other.

(5) 10The costs that the Secretary of State may be required to pay under subsection (4)
include, in particular, costs incurred by a primary contractor in taking a step specified
in a compliance notice under section 30, where the SSRO determines that it was
unreasonable for the primary contractor to be required to take that step.

(6) Subsection (7) applies where, in the case of a contract entered into before the
15relevant date, the contract requires the Review Board for Government
Contracts to make a determination or give an opinion in relation to any matter
referred to it.

(7) If a party to the contract refers the matter after the relevant date, the
determination or opinion is to be made or given instead by the SSRO.

35 20Recording, review and analysis functions

(1) The SSRO must keep an up-to-date record of—

(a) qualifying defence contracts and qualifying sub-contracts, and

(b) the duration of those contracts.

(2) The SSRO must keep under review the extent to which persons subject to
25requirements under section 23 or 24 (reports) are complying with them.

(3) The SSRO must, where requested to do so by the Secretary of State—

(a) analyse reports provided to it under section 23 or 24, and

(b) provide the results of such analysis to the Secretary of State or an
authorised person.

(4) 30In analysing reports provided to it under section 23 or 24, the SSRO may have
regard to such matters (other than matters contained in the reports) as it
considers appropriate.

(5) The Secretary of State may make the results of analysis under subsection (3)
available to an authorised person to whom those results have not already been
35provided; but those results may not otherwise be disclosed.

36 Provision of other services to Secretary of State

(1) The SSRO and the Secretary of State may make arrangements for the SSRO to
provide assistance or other services to the Secretary of State or an authorised
person.

(2) 40Arrangements made under subsection (1)—

(a) may in particular include arrangements for the SSRO to provide
information relating to the results of analysis carried out by the SSRO
under section 35(3), and

(b) may provide for the making of payments by the Secretary of State to the SSRO.

Disclosure of information

37 Disclosure of information

Schedule 5 contains provision about disclosure of information obtained under
5this Part.

Review

38 Review of Part and regulations under it

(1) The SSRO must keep under review the provision made by—

(a) this Part, and

(b) 10regulations under this Part which are for the time being in force.

(2) The SSRO may recommend to the Secretary of State such changes to the
provision mentioned in subsection (1) as it considers appropriate.

(3) Before the end of each review period, the Secretary of State must—

(a) carry out a review of the provision mentioned in subsection (1), and

(b) 15in doing so, have regard to any recommendations made under
subsection (2) at least 6 months before the end of the review period.

(4) In subsection (3), “review period” means—

(a) the period of 3 years beginning with the relevant date;

(b) each subsequent 5-year period.

39 20Power to repeal Part

(1) The Secretary of State may by order repeal this Part (apart from this section).

(2) An order under subsection (1) may transfer the SSRO’s property, rights and
liabilities.

(3) An order under subsection (1) may make consequential, supplementary,
25incidental or transitional provision.

(4) An order under subsection (1) is to be made by statutory instrument.

(5) An order under subsection (1) may not be made unless a draft of the
instrument containing it has been laid before, and approved by resolution of,
each House of Parliament.

30General

40 Single source contract regulations: general

(1) Single source contract regulations may make consequential, supplementary
incidental or transitional provision.

(2) Single source contract regulations may make different provision for different
35purposes.

(3) Single source contract regulations are to be made by statutory instrument.

(4) A statutory instrument containing single source contract regulations is subject
to annulment in pursuance of a resolution of either House of Parliament.

41 Interpretation etc

(1) 5In this Part—

• “authorised person” means a person authorised by the Secretary of State;

• “financial year” means a year beginning with 1 April;

• “primary contractor” has the meaning given by section 14(9);

• “qualifying defence contract” has the meaning given by section 14(2);

• 10“qualifying sub-contract” has the meaning given by section 27(2);

• “relevant date” has the meaning given by section 14(9);

• “single source contract regulations” has the meaning given by section
  14(9);

• “SSRO” means the Single Source Regulations Office;

• 15“sub-contractor” has the meaning given by section 27(2).

(2) In this Part—

(a) references to the value of a contract—

(i) are to its value as determined in accordance with single source
contract regulations, and

(ii) 20include references to its value as estimated in accordance with
such regulations;

(b) references to costs include references to—

(i) costs as estimated in accordance with single source contract
regulations;

(ii) 25a combination of actual costs and costs as so estimated.

(3) For the purposes of this Part, one person is “associated” with another if they are
group undertakings in relation to each other.

(4) In subsection (3), “group undertaking” has the meaning given by section 1161
of the Companies Act 2006.

(5) 30So far as there is any inconsistency between a provision of this Part or
regulations made under it (provision A) and a provision of a qualifying
defence contract (provision B), provision A prevails.

Part 3 Reserve forces

42 35Renaming of Army Reserve and Territorial Army

(1) The Army Reserve is renamed the Regular Reserve.

(2) The Territorial Army is renamed the Army Reserve.

(3) Accordingly, wherever it appears in the enactments mentioned in subsection
(4) (unless the context requires otherwise)—

(a) 40for “Army Reserve” substitute “Regular Reserve”, and

(b) for “Territorial Army” substitute “Army Reserve”.

(4) The enactments are—

• section 68 of the Marriage Act 1949,

• the Reserve Forces Act 1980 (including any headings),

• section 22 of the Criminal Appeal Act 1995,

• 5the Reserve Forces Act 1996 (other than paragraph 9 of Schedule 8), and

• the Armed Forces Act 2006.

(5) In any enactment passed before the relevant date (other than those dealt with
by subsections (3) and (4)), and in any instrument or other document made
before that date—

(a) 10references to the Army Reserve are to be read, in relation to any time on
or after that date, as references to the Regular Reserve, and

(b) references to the Territorial Army (including references which are
treated as references to the Territorial Army) are to be read, in relation
to any time on or after that date, as references to the Army Reserve.

(6) 15The “relevant date” is the date on which this section comes into force.

43 Call out of members of reserve forces

(1) In Part 4 of the Reserve Forces Act 1996 (special agreements for call out), in
section 28(3)(a) (maximum period of service), for “9 months” substitute “12
months”.

(2) 20Part 6 of that Act (call out for permanent service) is amended as follows.

(3) In section 54(1) (call out for warlike operations), after “order” insert “under this
section”.

(4) In section 56 (call out for certain operations), for subsections (1) and (1A)
substitute—

“(1B) 25The Secretary of State may make an order under this section authorising the
calling out of members of a reserve force if it appears to the Secretary of State
that it is necessary or desirable to use members of a reserve force for any
purpose for which members of the regular services may be used.”

(5) In the heading of that section, for “operations” substitute “purposes”.

(6) 30In section 57 (maximum duration of service for call out under section 56)—

(a) in subsection (4), for “9 months” substitute “12 months”,

(b) in subsection (6), for “9 months” substitute “12 months”,

(c) in subsection (8)(c), for “3 months” substitute “6 months”, and

(d) in subsection (11), for “27 months” substitute “3 years”.

(7) 35In section 57A (agreement to alter limits in section 57), in subsection (3), for “9
months” substitute “12 months”.

(8) In section 64 (interpretation of Part 6)—

(a) number the existing text as subsection (1), and

(b) after that subsection insert—

“(2) 40The powers under sections 52, 54 and 56 to make a call-out
order are each to be interpreted as including power to do so in
circumstances in which an order could also be made under
another of those sections.”

(9) Schedule 6 contains provision about transitional classes.

(10) In consequence of the amendments made by this section, omit section 28 of the
Armed Forces Act 2011.

44 Payments to employers etc of members of reserve forces

(1) 5In Part 8 of the Reserve Forces Act 1996 (schemes for exemption and financial
assistance), after section 84 insert—

“84A Other payments to employers etc of members of reserve forces

(1) The Secretary of State may by regulations provide for the making of payments
by the Secretary of State to—

(a) 10an employer whose employee is undertaking relevant reserve force
activities or has undertaken such activities while employed by the
employer, and

(b) a person carrying on business in partnership whose partner in the
business is undertaking relevant reserve force activities or has
15undertaken such activities while a partner of the person,

but see subsections (3) to (5).

(2) For the purposes of this section, a person undertakes relevant reserve
force activities when the person—

(a) is in permanent service under Part 4 or under a call-out order,

(b) 20undertakes training of a prescribed description while an
ordinary member of a reserve force, or

(c) performs other voluntary duties of a prescribed description
while an ordinary member of a reserve force.

(3) The Secretary of State may make regulations under this section only if
25satisfied that the payments provided for, or such payments taken
together with other measures, are likely to encourage persons—

(a) to employ, or continue to employ, members of the reserve
forces, or

(b) to carry on business, or continue to carry on business, in
30partnership with members of the reserve forces.

(4) Regulations under subsection (1)(a) may provide for the making of
payments to employers who are self-employed, but not in respect of
their own relevant reserve force activities.

(5) Regulations under this section may not provide for the making of
35payments to be conditional on a financial loss suffered by the employer
or the person carrying on business in partnership.

(6) A person making a claim under regulations under this section who is
dissatisfied with the determination of the claim may appeal against the
determination to a reserve forces appeal tribunal.

(7) 40In this section—

• “ordinary member”, in relation to a reserve force, means a member
  who—

  (a)

  is not a special member of that force, and

  (b)

  is not a member of that force for the purpose only of
  45becoming a special member;

Defence Reform BillPage 30

• “prescribed” means prescribed by regulations made under this
  section.”

(2) Schedule 7 contains supplementary provision.

45 Unfair dismissal of reserve forces: no qualifying period of employment

(1) 5The Employment Rights Act 1996 is amended as follows.

(2) In section 108 (unfair dismissal: qualifying period of employment) at the end
insert—

“(5) Subsection (1) does not apply if the reason (or, if more than one, the
principal reason) for the dismissal is, or is connected with, the
10employee’s membership of a reserve force (as defined in section 374 of
the Armed Forces Act 2006).”

(3) In section 192(2)(e) (armed forces), after “104C” insert “, 108(5)”.

(4) The amendment made by subsection (2) applies only where, in relation to the
employee, the effective date of termination (as defined in section 97 of the
15Employment Rights Act 1996) falls on or after the day on which this section
comes into force.

Part 4 Final provisions

46 Extent

(1) 20This Act extends to England and Wales, Scotland and Northern Ireland
(subject to subsection (2)).

(2) The amendments and repeals made by Part 3 have the same extent as the
provisions amended or repealed (ignoring extent by virtue of an Order in
Council).

(3) 25The power conferred by section 158(3) of the Reserve Forces Act 1980 (power
to extend to Isle of Man) is exercisable in relation to the amendments of that Act
made by section 42.

(4) The power conferred by section 132(3) of the Reserve Forces Act 1996 (power
to extend to Channel Islands and Isle of Man) is exercisable in relation to any
30amendment of that Act that is made by this Act.

(5) The power conferred by section 384(1) of the Armed Forces Act 2006 (power to
extend to Channel Islands) is exercisable in relation to the amendments of that
Act made by section 42.

47 Commencement

(1) 35Parts 1 to 3 come into force on such day or days as the Secretary of State may
by order made by statutory instrument appoint.

(2) An order under subsection (1) may appoint different days for different
purposes.

(3) This Part comes into force on the day on which this Act is passed.

(4) The Secretary of State may by order made by statutory instrument make
transitional, transitory or saving provision in connection with the coming into
force of any provision of this Act.

(5) An order under subsection (4) may make different provision for different
5purposes.

48 Short title

This Act may be cited as the Defence Reform Act 2013.

SCHEDULES

Section 4

SCHEDULE 1 Exemptions relating to premises used by a contractor

Introduction

1 5In this Schedule—

• “relevant premises” means any premises used by a contractor for the
  purposes of, or for purposes which include, providing defence
  procurement services to the Secretary of State by virtue of
  arrangements mentioned in section 1;

• 10“designated premises” means relevant premises which are for the time
  being designated for the purposes of a provision of this Schedule by
  order made by the Secretary of State.

Landlord and Tenant Act 1954 (c. 56)1954 (c. 56)

2 Part 2 of the Landlord and Tenant Act 1954 (security of tenure for business
15and other tenants) does not apply to—

(a) any tenancy granted by the Secretary of State to a contractor in
respect of any land in relevant premises, or

(b) any sub-tenancy of the whole or part of the land comprised in such a
tenancy or in a sub-tenancy to which this sub-paragraph applies.

20Nuclear Installations Act 1965 (c. 57)1965 (c. 57)

3 (1) For the purposes of sections 1 and 2 of the Nuclear Installations Act 1965
(restriction of certain installations to licensed sites and prohibition of certain
operations), any site in designated premises is to be treated as a site used by
a government department.

(2) 25Sub-paragraph (3) applies if a contractor uses any site in designated
premises for a purpose which, if section 1 of that Act applied to the
contractor in relation to the site, would require the authority of a nuclear site
licence.

(3) The provisions of that Act other than sections 1 to 6 and 22 have effect as if—

(a) 30the contractor were the licensee under a nuclear site licence in respect
of the site, and

(b) any reference to the period of the licensee’s responsibility were a
reference to any period during which the contractor occupies the site.

Health and Safety at Work etc Act 1974 (c. 37)1974 (c. 37)

4 (1) The Secretary of State may by order exempt a contractor, in relation to
relevant premises or activities carried on by a contractor at relevant
premises, from any of the following—

(a) 5sections 21 to 25 of the Health and Safety at Work etc Act 1974;

(b) any other provision of Part 1 of that Act apart from sections 33 to 42;

(c) any provision of regulations made under that Part.

(2) But an exemption may be conferred by virtue of sub-paragraph (1)(b) or (c)
only if, and to the extent that, it appears to the Secretary of State necessary
10or expedient to do so in the interests of the safety of the State.

(3) An exemption conferred by virtue of sub-paragraph (1)—

(a) may have effect generally or only in particular respects;

(b) may be expressed as having effect in relation to premises for the time
being specified in the order.

15Radioactive Substances Act 1993 (c. 12)1993 (c. 12)

5 The Radioactive Substances Act 1993 has effect, in relation to designated
premises and a contractor, as if the designated premises were occupied by
the contractor on behalf of the Crown for the purposes of the department of
the Secretary of State having responsibility for defence.

20Environmental Permitting (England and Wales) Regulations 2010 (S.I. 2010/675S.I. 2010/675)

6 The Environmental Permitting (England and Wales) Regulations 2010 have
effect, in relation to designated premises and a contractor, as if the
designated premises were used or occupied by the contractor on behalf of
the Crown for the purposes of the department of the Secretary of State
25having responsibility for defence.

Power to create other exemptions

7 (1) The Secretary of State may by order provide for exemptions for a contractor,
in relation to relevant premises or activities carried on by a contractor at
relevant premises, from any provision of subordinate legislation.

(2) 30An order under this paragraph may confer an exemption only if the
exemption corresponds or is similar to an exemption for, or immunity of, the
Crown.

(3) An exemption conferred by virtue of sub-paragraph (1)—

(a) may have effect generally or only in particular respects;

(b) 35may be expressed as having effect in relation to premises for the time
being specified in the order.

(4) In this paragraph “subordinate legislation” has the same meaning as in the
Interpretation Act 1978 (see section 21(1) of that Act).

Orders under this Schedule

8 (1) 40Orders under this Schedule are to be made by statutory instrument.

(2) A statutory instrument containing an order under this Schedule is subject to
annulment in pursuance of a resolution of either House of Parliament.

Section 7

SCHEDULE 2 Restrictions on disclosure or use of information

5Introduction

1 (1) This Schedule applies where the disclosure or use of relevant information is
restricted by an obligation of confidence.

(2) In this Schedule, “relevant information” means information obtained by the
Secretary of State (whether before or after the coming into force of this
10Schedule) under or in connection with a relevant contract.

(3) “Relevant contract” means a contract entered into by the Secretary of State at
any time before the vesting date for the purposes of defence procurement.

Disclosure between the parties etc

2 (1) The obligation does not prevent or penalise the disclosure of relevant
15information—

(a) between the Secretary of State or an authorised officer of the
Secretary of State and a contractor or an employee of or service
provider to a contractor,

(b) between a contractor and an employee of or service provider to the
20contractor, between one such employee and another, between one
such service provider and another or between one such employee
and one such service provider, or

(c) between a contractor or an employee of or service provider to the
contractor and another contractor or an employee of or service
25provider to the other contractor,

if the disclosure is necessary or expedient for the purposes of arrangements
mentioned in section 1.

(2) The obligation does not prevent or penalise the disclosure of relevant
information—

(a) 30by a former contractor or an employee of or service provider to a
former contractor to the Secretary of State or an authorised officer of
the Secretary of State,

(b) by a former contractor or an employee of or service provider to a
former contractor to a contractor or an employee of or service
35provider to a contractor, or

(c) between a former contractor and an employee of or service provider
to the former contractor, between one such employee and another,
between one such service provider and another or between one such
employee and one such service provider,

40if the disclosure is necessary or expedient for the purposes of arrangements
mentioned in section 1.

(3) The obligation does not prevent or penalise the use of relevant information
disclosed to a contractor or an employee of or service provider to a
contractor under this paragraph if—

(a) the information is used by the contractor or the employee or service
5provider for any purpose for which the Secretary of State could have
used the information, and

(b) the use of the information is necessary or expedient for the purposes
of arrangements mentioned in section 1.

Disclosure and use for audit purposes

3 (1) 10The obligation does not prevent or penalise the disclosure of relevant
information by a contractor or an employee of or service provider to a
contractor, or the use of that information by the person to whom it is
disclosed, if—

(a) the disclosure is to the Comptroller and Auditor General, or a person
15exercising an audit function of the Comptroller’s, and the
information could lawfully be disclosed to the Comptroller or that
person by the Secretary of State, or

(b) the disclosure is to an accounting officer, or a person exercising an
audit function of the officer’s, and the information could lawfully be
20disclosed to that officer or person by the Secretary of State.

(2) In this paragraph—

• “accounting officer” means an officer appointed by the Treasury under
  section 5(6) or (8) of the Government Resources and Accounts Act
  2000 (resource accounts);

• 25“audit function” in relation to the Comptroller and Auditor General,
  includes any function under Part 2 of the National Audit Act 1983
  (examinations into economy, efficiency and effectiveness).

Unauthorised disclosure of information

4 (1) This paragraph applies where—

(a) 30information is disclosed to a person in accordance with paragraph 2
or 3 (“the original disclosure”), and

(b) that person, or any other person to whom the information is
subsequently so disclosed, discloses the information otherwise than
in accordance with paragraph 2 or 3 (“the unauthorised disclosure”).

(2) 35The person making the unauthorised disclosure is to be treated for all
purposes as if that person were subject to the obligation which restricted the
original disclosure.

(3) But where the person making the unauthorised disclosure is an employee,
the information is to be treated as if it had been disclosed by the person’s
40employer.

Unauthorised use of information

5 (1) This paragraph applies where—

(a) information is disclosed in accordance with paragraph 2 to a person
other than the Secretary of State or an authorised officer of the
45Secretary of State, and