Giving councils clear legal freedom is the only way to ensure the Government’s new General Power of Competence for local authorities will work successfully, according to the New Local Government Network. It is urging the abolition of the ultra vires principle, which exists to prevent councils going beyond their powers, and instead to allow councils to take actions unless they are expressly forbidden by law.
The NLGN report has been produced as Parliament is about to consider a General Power of Competence for local authorities.The report details innovative activities councils could consider adopting and recommends how the reform should be enacted.
With councils losing a third of central government funding over the next four years, the research argues that they should be free to develop new income streams and be allowed to work more innovatively in partnership with the private sector, community groups and other public bodies to make savings and redesign services.
Possible new ventures and activities in the report include offering banking, insurance and credit services, trading and selling a wider range of products and expertise such as recruitment services, energy, communication and business services to the private sector and other public agencies and adjusting tax rates and reliefs to incentivise behaviour on recycling, business development or property use.
The report’s author, Nigel Keohane, who is NLGN’s head of research, said: “In the difficult financial landscape ahead, local authorities need full discretion to engage in new ways with their community, to save money through efficiencies and to develop income to safeguard frontline services.