CLG officials have dismissed fears local authorities could soon levy extra taxes on residents, after comments about new trading powers for town halls by communities secretary, John Denham, were misinterpreted. Speaking to The MJ last week, Mr Denham said there existed ‘more scope for money-earning municipal enterprise'. He repeated his comment during a speech to the Royal Society of Arts (RSA) on 21 October, but his words led some to infer that councils were to be given new tax-raising powers. Mr Denham told the RSA he wanted to encourage wider use of local government's ‘powers to trade' as the fiscal environment tightened, by mirroring work undertaken at Stockport MBC with waste and recycling, for example. Councils currently generate around £1bn a year through activities relating to their powers to trade, but Mr Denham lamented that ‘only one-quarter of councils are doing so'. He added: ‘I would like to see a renaissance of municipal enterprise. Such services could increase competition, delivering a better deal for consumers. And councils could use surpluses from commercial [activities].' Despite this, reports emerged that Mr Denham was planning new tax powers for the sector. A CLG spokesman told The MJ: ‘Mr Denham is categorically not suggesting that local authorities could raise income from local taxes. ‘He is considering how to strengthen and enhance the role of local government. This could include taking greater advantage, like many authorities already have, of powers to trade in waste and recycling facilities, or developing new forms of investment.'
