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Councils and communities have been handed wide-ranging new powers over public services under Eric Pickles' radical plan to shift the balance of political and economic power from Whitehall to localities. The Localism Bill will introduce the wide-ranging ‘general power of competence' (GPC) to councils. Under the GPC, councils will be empowered to take any action they deem necessary to improve the economic, social and environmental wellbeing of their area or its residents – providing it is not specifically prohibited. Mr Pickles told The MJ, swaths of existing council powers and central government-granted permissions could be swept from the statute books because they would become ‘redundant'. Mr Pickles said the idea is to ensure councils ‘become the deliverers of genuine local government' and ‘do not simply administer decisions and laws handed down by central government'. ‘For too long, local government has been restricted by the powers it has been handed from the centre. I'm saying to them ‘you're in charge locally, go and deliver what is in the interest of your communities,' he said. But he added ‘there will be restrictions' and warned there would be ‘no new taxes' under the regime. The GPC would move local authorities beyond existing wellbeing powers by allowing councils, for example, to form collectives such as the Local Authorities Mutual Ltd (LAML) with little threat that schemes would be legally blocked. LAML was set up in 2007 to provide low-cost council insurance services across London but, to the consternation of local government, was later deemed an unlawful use of powers. A CLG spokesman said: ‘The GPC would prevent cases like LAML, providing it is clear there is a public good at the centre of the proposal.' It would also allow councils to establish community banks and run new services on behalf of residents. But the GPC is merely one tenet of Mr Pickles' plan to devolve significant powers down to local authorities and on to neighbourhoods. The Localism Bill also hands residents powers to veto ‘excessive' council tax rises. The veto, which the Government hopes to have in place in time for March's local tax settlements, will replace what the CLG describes as ‘top down council tax capping by Whitehall, which gave no choice to local residents'. Any proposed tax rise above a specified ceiling would trigger an automatic local referendum – the right to hold local referenda forms a key part of several policies outlined on the Bill – with residents asked to choose between contrasting budgets suggested by councils. The Community Right to Challenge will allow community groups to bid to run local services. Speaking last week, decentraliation minister Greg Clark said the power would benefit charities and their voluntary sector, but would not be reserved specifically for those groups. Groups of council or other public sector staff ‘mutuals' could also be establihsed to run servcies. As The MJ went to press, it was not clear whether private sector bodies would be empowered to trigger challenges to services – it seems more likely they could assist other groups in procuring services. A source at No. 10 said Mr Pickles' right to challenge ‘dovetailed neatly' with Mr Cameron's Big Society initiative to enocourage low-cost voluntary and community groups service provision. The Community Right to Buy, meanwhile, will give residents and community groups ‘first refusal' on the purchase and management of local community assets such as pubs, Post Offices and leisure centres.

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WHITEHALL

Control shift as powers move to communities

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