b'required for land disposals at less than best consideration reasonably obtainable, subject to a short tenancies exception as defined). The Court of Appeal found against the Council on the grounds that to vary a right did not necessarily entail disposing of the right and section 233 did not, in those circumstances, apply. The Council was in error in demanding money in return for the variation. Municipal trading 2.6 The above demonstrates that the law on local authority charging powers, prior to 2003 was in a very uncertain and unsatisfactory state. The then Labour Government acted to try to remove uncertainty by bringing into force the Local Government Act 2003 (the 2003 Act) and provide an express statutory power to charge for the provision of discretionary services. However, the law relating to charging was only part of the story. Trading activities too were frowned upon by both courts and local authority regulators (the Audit Commission). Trading per se has been always been a controversial activity in local government but it began to cause significant issues during the 1980s and 1990s. Under the Conservative Governments Compulsory Competitive Tendering regime, local authorities were required, by law, to make a return on capital employed by in-house trading departments (known as DSOs or direct service organisations) who were undertaking defined activity work for the Council. Back then, Central Government policies were aimed at increasing privatisation and encouraging outsourcing of service provision rather than provision of services through directly employed staff. Legislation required certain defined services to be put out to competitive tender by local authorities when trading targets were not met by the in-house DSO. Some local authorities opposed to outsourcing sought instead to perform services for other public bodies through DSOs by trading with and performing services for other public bodies. The Audit Commission had concerns about the nature and extent of such trading and sought to limit trading only to instances where an authority could demonstrate adequate spare capacity. The scope of local authorities legal powers to engage in municipal enterprise continued to develop in an uncertain way, with a lack of clarity over the applicability of the ultra vires doctrine to trading type activities. This was exacerbated by case law, which eroded the confidence of local authorities (and those contracting with them) in their powers to trade where a specific enabling power could be identified and/or the authority sought to rely on incidental powers under section 111 of the 1972 Act. The few specific enabling powers in place before the 2003 Act added weight to the argument that a general power to trade could not logically exist. Such powers were also haphazard, rather than reflecting a carefully structured plan to define the ambit of trading powers. For example, the Civic Restaurants Act 1947 contains enabling powers for some authorities to establish restaurants and similar places of refreshment for the public. The Local Government (Miscellaneous Provisions) Act 1976 empowers local authorities to trade in spare computer and IT capacity. 42'