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By Richard Johnstone, Public Finance
Councils face constraints on their ability to reform and improve local public services despite town halls being given a general power of competence, the Local Government Association has said.
Publishing an examination of how local authorities have used the power – introduced in February 2012 to allow councils to do ‘anything that individuals generally may do’ – the LGA said further freedoms were required for the reform to be effective.
Its report highlighted that some councils had used the power to develop and support a school improvement programme, while others had made loans to local businesses or indemnified mortgage lenders to boost local housing markets.
LGA chair Sir Merrick Cockell said that, although it has only been in place for a short time, the general power of competence has shown what councils can do when given the trust and power to make a real difference.
However, he added that it remains limited by constraints set by Whitehall.
‘Easing those restrictions would certainly help encourage others to unlocking the potential of using it.’
Among the constraints that hinder further use of the power, were trading restrictions on councils, as a limited number of company structures are permitted.
Councils are also limited in what services they can charge for – under the power, payment can only be made for discretionary services, and only as a way to recover costs, and not to generate a profit.
The power also does not extend the legal powers of councils to create new byelaws or undertake enforcement, he added.
There was a need to go further, giving councils more control over local services and spending, so they can respond to the 10% cut in 2015/16 announced in last month’s Spending Review.
‘What is needed is this devolution of decision making and power to local areas to get government agencies, councils, the police, head teachers and health professionals working together to design services that work for their communities. This will ultimately save money and lead to better services,’ said Cockell.
‘This is vital if we are going to be able to rewire and redesign more efficient public services and help local areas promote growth.’
The LGA’s research is published ahead of an event, being held alongside the National Association of Local Councils, today.