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Local Government: Partnerships

Volume 506: debated on Tuesday 2 March 2010

To ask the Secretary of State for Communities and Local Government whether he has made an assessment of the effects of the Court of Appeal ruling in the case of Brent London Borough Council v. Risk Management Partners Limited on the entry of local councils into joint companies and partnerships other than mutual insurance bodies. (319312)

Provisions to enable best value authorities to set up and participate in mutual insurance arrangements were secured in the Local Democracy, Economic Development and Construction Act 2009. We have made clear that we are committed to considering further the adequacy of local authority powers following the consultation on ‘Strengthening Local Democracy’ (July 2009) and the responses to it. The Government are interested in extending powers—subject to certain prudential restrictions—to deal both with the issues raised in the LAML case around councils giving guarantees and indemnities to each other and also to ensure greater clarity in relation to action to drive efficiency and cost savings and so secure best value. These will be taken forward at the first legislative opportunity. Such developments are intended to ensure that councils will have a broad range of powers on which to take action in their communities' interests, building on the best value duty. The well-being power remains as a power of first resort for councils acting in relation to the social, economic and environmental well-being of their areas. The White Paper ‘Putting the Frontline First: Smarter Government’ (December 2009) and the pre-Budget report have committed to further exploring, subject to the overall fiscal position, what further finance mechanisms, powers and flexibilities could support local authorities to drive growth and innovation most effectively.