b'Chapter 3 Charging under the 2003 Act Introduction 3.1 In 2003 primary legislation was introduced in an attempt to remedy uncertainties and concerns over charging powers and to provide local authorities with new powers to levy discretionary charges for some services and to facilitate commercial trading activities. This legislation is contained in the 2003 Act and associated statutory Instruments made thereunder. For the first time, the 2003 Act made distinctions between charging and commercial trading activities. Before this Act, legislation made no such distinction and charging and trading were regarded as part of the same activity. Section 93 of the 2003 Act allows local authorities to charge at cost for discretionary services within certain limitations and section 95 allows for trading in a more commercial context. The introduction of commercial trading powers via section 95 of the 2003 Act also signalled a virtual end to public body designation orders under the Local Authorities (Goods and Services) Act 1970 (the 1970 Act), although the then Government decided not to repeal the 1970 Act. Whilst the retention of the 1970 Act on the statute books was welcomed by many in local government, the DCLG clearly expected local authorities to make less and less use of the 1970 Act powers given the bespoke commercial trading powers they had introduced. However, many authorities, preferred to use the 1970 Act powers to provide the vires for one particular type of trading, namely inter-authority trading. One major issue is the distinction between commercial trading on the one hand and inter-authority trading (also known as shared services or municipal trading) on the other. These and other issuessuch as the fact that commercial trading under section 95 requires a special purpose trading vehicle (ie a company) to be set up before commencement of the trading activityhave acted as barriers to municipal enterprise and have added layers of complexity to an already complex area. Income-generating initiatives 3.2 With the unprecedented scale of cuts in public expenditure and financial support from central government, more and more local authorities are: exploring income generating activities (such as commercial trading); or seeking to generate increased revenue from levying charges on hitherto free services or else are raising charges for services already subject to charges; and/or looking to join up with other authorities to share services or rationalise to make better use of scarce public resources. 45'