Councils to get more powers to borrow

New draft legislation on local government
regulations promises to give local authorities more freedom for
funding and commissioning services.

The
draft Local Government Bill includes proposals to give councils the
power to borrow money to pay for major building projects, set up
schemes with businesses to improve their area and offer more
flexibilities for top performing councils.

The
bill, published by the Office of the Deputy Prime Minister, follows
last December’s local government white paper Strong Local
Leadership – Quality Public Services.

Giving
local authorities the freedom to borrow money to finance capital
schemes will be particularly welcomed, as it should offer the
chance for enhanced investment in infrastructure and
services.

Currently, councils have to get
government permission to borrow money and have argued for some time
that the requirements are too restrictive.

Meanwhile a new report by the
Commission on Local Governance argues that close central government
control is stifling councils’ ability to deliver good public
services.

The
report, Free to Differ: A Future for Local Democracy,
recommends local authorities be allowed to increase the amount of
money they raise locally to upwards of 50 per cent of their total
budget.

For
more on the report go to www.lgiu.gov.uk/celebrate/Press1.htm