Draft general power "risks stifling innovation"

The general power of competence for local authorities as drafted in the Localism Bill risks stifling innovation and creativity in public service delivery, it has been claimed.

In a submission to the House of Commons’ Scrutiny Unit, the chairman of the Bar Association for Local Government and the Public Service, Dr Mirza Ahmad said: “Parliament giving a general power of competence to local authorities, on one hand, should not then, on the other hand, subject it to unnecessary limitations and restrictions, which would have the effect of stifling innovation and creativity in public service delivery – the same innovation and creativity that the government is seeking to engender through its public service reform.

“The rationale, therefore, for limiting charges to ‘not exceed the cost of provision’ – Clause 3(3) – in today’s harsh economic and budgetary realities facing local government becomes totally unnecessary and a positive affirmation of the State’s inherent desire to continue to impose controls over local government.”

Dr Ahmad, Corporate Director of Governance at Birmingham City Council, added that linking such innovation and creativity – “however ‘limited’ under the new rules” – to just a ‘company’ structure (as defined in the Bill) was also too restrictive and unnecessary.

He suggested that clauses 5 and 6 of the Bill – giving the Secretary of State powers to make supplemental provision – were a further indication of the State’s “continuing desire to impose controls over local government and very much evident of the ‘existing regime’ and not the one that the government is seeking to create with the general power of competence.

“I accept that central government – of all political persuasions – will want to retain ‘some’ degree of control over local authorities with regard to the exercise of the general power, but such control must not only be necessary and appropriate, but proportionate to the general aims of furthering – not restricting at birth – the general power of competence to local government.”

The government also appears to be missing a “golden opportunity” in the Localism Bill to include a general power of competence for all public sector organisations that work with or seek to work in partnership with local authorities, Dr Ahmad claimed.

He repeated the BALGPS’ recent suggestion to the Treasury and Cabinet Office call for evidence on public service reform for all public bodies to be placed under a statutory duty to work collaboratively with each other and local government.

Such a move would ensure that all public expenditure within the local authority’s area – and in partnership with neighbouring authority areas – is spent in a cost effective and efficient manner, he said.

Dr Ahmad explained: “Such provisions are not only necessary in terms of ‘community based budgeting’, but such provisions will serve to avoid the need for further legislation and should mean that other public bodies will not need to ‘search’ for their own general powers of competence to enter into arrangements, with local government and others, for the public good.”