Local Government Services: Small Businesses

Department for Communities and Local Government written question – answered on 5th February 2015.

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Photo of Toby Perkins Toby Perkins Shadow Minister (Business, Innovation and Skills)

To ask the Secretary of State for Communities and Local Government, if he will take steps to ensure that local authorities trading under the general power of competence granted by the Localism Act 2011 do not unfairly compete with existing local small businesses.

Photo of Kris Hopkins Kris Hopkins The Parliamentary Under-Secretary of State for Communities and Local Government

The Government has devolved powers to local authorities to do anything that individuals generally may do, and it is their responsibility to balance the considerable opportunities to deliver efficient services for their communities with the needs of small businesses in their area. We want councils to be able to act confidently, without constantly looking back to Whitehall for permission. This is what devolution means.

The general power of competence provisions set out in the Localism Act 2011 build on existing powers to charge and to trade. Local authorities can charge for discretionary services, so long as they are not required to provide the service, they have the power to provide the service, the charges are on a cost recovery basis, and the individual agrees to the service being provided. If a local authority wishes to trade for a commercial purpose, this must be carried out through a company to ensure that it does not have an unfair tax advantage over business. Local authorities, like other bodies, are subject to and must abide by competition law and it is their responsibility to ensure they comply with the requirements of state aid, competition and procurement law.

The Government will honour its commitment to conduct a post implementation review of the Localism Act 2011, and any concerns from small businesses about unfair competition will be considered as part of that review.

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