06 December 2002
The Local Government Association is worried that the deal, which creates a free market in the service sector, will jeopardise authorities' control over core activities such as the procurement of services, licensing regimes and the planning system.
It fears that councils could be forced to throw open many more services to competition, and that companies would be able to challenge planning decisions on anti-competitive grounds.
The LGA has sent a letter to authority chief executives on the impact of the General Agreement on Trade in Services, negotiated under the aegis of the World Trade Organisation.
Department of Trade and Industry officials insist that government services not provided on a commercial basis will be exempt. But the LGA believes that, since many have been subject to outsourcing or competitive tendering, these services could be judged to fall within the ambit of the Gats.
The letter says: 'There is considerable anxiety that these tough criteria are very much open to interpretation and that the WTO dispute settlement process could be used to enforce a strongly deregulatory interpretation in favour of business interests.'
The World Development Movement, a lobbying organisation, has produced a report on the UK's commitments under the Gats which backs the LGA's concerns.
Peter Hardstaff, head of policy at the WDM, said the government's ability to protect the public interest by stipulating a not-for-profit service provider, or providing subsidy to public sector organisations, could be curtailed by the Gats.
He accused ministers of sidestepping worries over private sector involvement in public services and of signing them over to 'unelected trade lawyers at the WTO'.
Hardstaff added: 'Gats' negotiations could bypass these debates by binding the UK to effectively irreversible liberalisation rules at the WTO.'
PFdec2002
