PluggedIN, Trading Councils

Author: Alex Thomson, Localis (in the MJ)   |  

It is an oft-repeated truism that, in a time of austerity, local authorities must be innovative.
But, in a ‘policy platform’, published by Localis this week, a distinguished group of local government experts argue that a golden opportunity – in the form of councils’ trading powers – is being, for the most part, overlooked.

The coalition government’s Localism Bill contains provisions for granting councils a general power of competence allowing local authorities ‘to raise money by charging and trading, in line with existing powers and to provide indemnities and guarantees’. This will hopefully give the final green light for councils to fully utilise their commercial powers for the good of their area.

The contributors to this month’s Localis policy platform are in agreement that, if local authorities could look beyond their – often incorrect – assumptions about their capacity to trade, then they – and so their localities and their residents – could be reaping the rewards of commercial opportunities. They also argue that a localist credo dictates that councils can and should be able to behave as any other business would – with financial self-sufficiency and flexibility.

Leader of Bracknell Forest Council, Paul Bettison hopes that, with the general power of competence, local authorities will be given a clearer picture of the legalities and freedoms with which they can use their commercial powers, and that this will lead to an outwardly-focused ‘entrepreneurial spirit’ and bold decision-making.

Jenny Owen, deputy chief executive and commissioning director of adult social services at Essex CC, provides examples from her county demonstrating how councils can develop an identity beyond that of a service-provider. She also notes that local authorities are not solely limited to trading with the private sector, and that other councils provide equally-vital and potentially-profitable commercial openings.

Judith Barnes, partner and head of local government at Eversheds LLP, describes and then dispels the myths and misunderstandings around what councils can and can’t do in terms of trading. She contends that these damaging misconceptions are curbing the willingness of councils to consider the use of their commercial powers as a viable option.

And finally, the leader of Surrey CC, Dr Andrew Povey, argues that while councils must take the initiative themselves to make better use of trading powers, there are still barriers to financial self-sufficiency which must be removed, if local authorities are to capitalise on lucrative commercial opportunities in a time of public spending frugality.

We hope you enjoy reading these informative and stimulating contributions to a vital debate.