New laws coming into effect today give local councils more freedom to decide how to manage their finances, to engage in trade and charge for services which are not a legal requirement. They are now free to borrow without Government consent, provided they can afford to take on the debt. The new laws also give greater control over council tax discounts and discretion to reduce the council tax on second homes, charge full council tax on long-term empty homes and introduce their own discounts or exemptions from council tax.The power to trade in any of the council’s normal functions has only been given to the better performers. Those councils classified under the Comprehensive Performance Assessment as excellent, good or fair will have the power, but those in the two lower categories will not.
A number of councils are poised to take advantage of the new freedoms. Lancashire County Council plans to spend 14m pounds on the refurbishment of care homes to meet the National Care Standards. Sales of surplus homes will in due course offset the costs and produce savings which make the scheme is affordable. The London Borough of Tower Hamlets plans to spend: 35m pounds on the renewal of a lease of a administrative building and 10.9m pounds on an administrative buildings strategy, consolidating operations into two principal buildings, with savings being used to finance the borrowing. Norwich City Council plans to spend 5m pounds on the reconstruction of a multi-storey car park.