By Tash Shifrin
2 October 2009
Local government leaders have urged ministers to give councils a new ‘power of general competence’ as a pioneering mutual insurance scheme went into provisional liquidation this week.
The demand comes in the Local Government Association’s response to a government consultation that was set to close on October 2. It argued that a court ruling against London Authorities Mutual Ltd had exposed the limits of councils’ existing ‘wellbeing’ powers.
But ministers appeared to have ruled out this power in their own response to the Commons communities and local government select committee, which was slipped out quietly during the parliamentary recess – while the consultation was still live.
In June, the court of appeal ruled that councils’ participation in Laml was beyond their statutory powers.
That judgment could yet be contested, with the London Borough of Harrow seeking support and finance from other authorities to mount a Supreme Court challenge.
But the debate over changes to the legal framework is also set to escalate, with Conservative leader David Cameron pledging a general competence power if his party wins the general election.
In its consultation response, the LGA backed specific legislation to enable councils to set up mutual insurance schemes.
But it added that councils also wanted ‘greater legal clarity and certainty’ over their scope to provide other financial services, or to set up mutuals in other fields, ‘for example for housing provision or regeneration, whether controlled by a single authority or in partnership’.
Councils wanted ‘a legal framework which clearly stated that more efficient and cost-saving ways of working are a contribution to wellbeing’, the LGA said. ‘However, rather than legislation on a range of detailed specific concerns, we advocate support for innovation and local initiative through creating a power of general competence for local government.’
But the ministers’ reply to the select committee said the government was looking only at a specific measure on insurance mutuals, ‘as changing the wellbeing power or introducing another form of general power, such as a power of general competence, would not be certain to ensure that local authorities could engage in mutual insurance arrangements’.
Laml announced on September 25 that it would appoint provisional liquidators as ‘the most appropriate way to ensure a timely and orderly winding-up of Laml’s insurance-related affairs’.
2 October 2009
Local government leaders have urged ministers to give councils a new ‘power of general competence’ as a pioneering mutual insurance scheme went into provisional liquidation this week.
The demand comes in the Local Government Association’s response to a government consultation that was set to close on October 2. It argued that a court ruling against London Authorities Mutual Ltd had exposed the limits of councils’ existing ‘wellbeing’ powers.
But ministers appeared to have ruled out this power in their own response to the Commons communities and local government select committee, which was slipped out quietly during the parliamentary recess – while the consultation was still live.
In June, the court of appeal ruled that councils’ participation in Laml was beyond their statutory powers.
That judgment could yet be contested, with the London Borough of Harrow seeking support and finance from other authorities to mount a Supreme Court challenge.
But the debate over changes to the legal framework is also set to escalate, with Conservative leader David Cameron pledging a general competence power if his party wins the general election.
In its consultation response, the LGA backed specific legislation to enable councils to set up mutual insurance schemes.
But it added that councils also wanted ‘greater legal clarity and certainty’ over their scope to provide other financial services, or to set up mutuals in other fields, ‘for example for housing provision or regeneration, whether controlled by a single authority or in partnership’.
Councils wanted ‘a legal framework which clearly stated that more efficient and cost-saving ways of working are a contribution to wellbeing’, the LGA said. ‘However, rather than legislation on a range of detailed specific concerns, we advocate support for innovation and local initiative through creating a power of general competence for local government.’
But the ministers’ reply to the select committee said the government was looking only at a specific measure on insurance mutuals, ‘as changing the wellbeing power or introducing another form of general power, such as a power of general competence, would not be certain to ensure that local authorities could engage in mutual insurance arrangements’.
Laml announced on September 25 that it would appoint provisional liquidators as ‘the most appropriate way to ensure a timely and orderly winding-up of Laml’s insurance-related affairs’.
