London Borough of Croydon

General power of competence

The Localism Act includes a 'general power of competence'. It gives local authorities the legal capacity to do anything that an individual can do that is not specifically prohibited; they will not, for example, be able to impose new taxes, as an individual has no power to tax.

The new, general power gives councils more freedom to work together with others in new ways to drive down costs.

The general power of competence does not remove any duties from local authorities - just like individuals they will continue to need to comply with duties placed on them. The Act does, however, give the Secretary of State the power to remove unnecessary restrictions and limitations where there is a good case to do so, subject to safeguards designed to protect vital services

The 'general power of competence' gives local authorities more freedom to do things and this is welcomed. There are some restrictions on how the power can be used and limits on when it can be used to generate income. The Secretary of State can impose further restrictions so the extent of the power will become clearer over time.

Ministers can order local authorities to pay fines for breaches of EU law in cases where they are deemed responsible for the failure to comply with EU law.

The current standards framework and the national regulatory body, Standards for England, will be replaced with new local arrangements that will have implications for all councils.

The Act clarifies the rules on 'predetermination' to reflect case law (so there is no change in practice). The rules of predetermination make sure councillors take part in discussions and make decisions with an open mind.

Councils will have more freedom to offer business rate discounts, but the cost of discounts must be met locally.

Other measures include some flexibility on governance arrangements, directly elected mayors, and items relating to London and major cities.