Councils' powers must not be restricted, says NLGN

31 Aug 10
A legal principle that restricts council activity should be removed to allow local authorities to pursue money-making schemes, a think-tank says today

By Vivienne Russell

 31 August 2010

A legal principle that restricts council activity should be removed to allow local authorities to pursue money-making schemes, a think-tank says today.

A New Local Government Network report is calling for the abolition of the ultra vires principle, which ensures councils do not stray beyond their powers. The think-tank says ultra vires could undermine the effectiveness of a General Power of Competence, which the government has promised to introduce.

And with councils set to lose up to a third of the funding they receive from central government, the NLGN says they must be free to generate new revenue streams, such as offering banking and insurance services and varying planning and licensing fees.

The report urges the government to give councils the freedom to act as they like in the interest of their communities as their actions are not specifically illegal.

Nigel Keohane, head of research at the NLGN, said: ‘This power has the potential to be a major piece of reform that heralds a new era of localism. For too long, democratically elected councils have been restricted in what they can do and vulnerable to legal challenge for adopting innovative responses to local challenges.

‘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.’

Keohane added that the power would require a ‘leap of faith’ from national politicians to work.

‘It will then rest on the ambition and aspiration of local communities to determine how best to improve the lives of their residents.’

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