Minister says councils are not doing enough to stave off economic crisis

Date published: 18/11/2008

A Government minister has accused local authorities of not doing enough to help residents “ride out tough economic times” by not making use of the 'wellbeing power', which the majority of councils know about but do not use.

John Healey, the local government minister, told council leaders this week that the majority of local authorities were failing to make the most of the legal wellbeing power that could help stave off the worst effects of the economic downturn.

The ‘wellbeing power’ allows local authorities to do anything, short of raising taxes, to promote local economic, social and environmental wellbeing. However, while nine out of ten councils are aware of the power, fewer than one in twelve are using it.

Mr Healey said the power could be a key tool for councils to ride out the economic downturn, using it, for example, as a legal cornerstone to invest in improvements to the local area, attracting new businesses and creating new jobs for residents.

He believes that as long as the council's actions are in the interest of local wellbeing, the power is available to enable a wide range of actions, saving councils time, avoiding complex legal procedures and cutting red tape.

Given to councils in 2000, this 'power of first resort' can save councils from checking through numerous different laws, and enables them to focus on achieving their goals, unless it's specifically prohibited by legislation.

"The wellbeing power could be used to tackle some of the very real problems faced by communities during this economic downturn,” explained Mr Healey, who visited Rochdale earlier this year. “Some councils have shown the way, using it to drive investment in their area, get local people into jobs or make savings by delivering more efficient services. I'm determined that more of them see this potential. That's why I am writing to all councils highlighting practical advice that will help them put this key tool to best use."

Rochdale’s Labour Parliamentary Candidate, Simon Danczuk, praised Mr Healey’s comments for drawing attention to the powers that local authorities have to stimulate the local economy.

“As unemployment starts to increase in Rochdale the response from our Council seems to be to blame everyone else and sit on their hands,” he said. “The Local Government Minister’s advice should be siezed upon by the Lib Dems and they need to start introducing policies that can help support the people of Rochdale through the downturn.”

In Wakefield, families living on an estate blighted by crime and drug-abuse were given a lifeline by the wellbeing power. It allowed the houses to be bought by the Council without a lengthy Compulsory Purchase Order process. The families were able to move away from the area and get a fair price for their homes and the Council was free to redevelop the estate.

The Local Government Minister’s comments coincided with the launch of a Local Government Association report highlighting the impact of the credit crunch on different regions. One of its key recommendations to help local authorities recover from recession was targeted infrastructure investment to ensure that high priority employment locations are better placed to recover.

“This is an area where Rochdale now has a big Achilles heel because of the Lib Dems’ failure to progress on regenerating our town centre,” argued Mr Danczuk. “I am very worried at what the long-term cost might be of the Council having to postpone the regeneration of our town centre because of failings with the selection process. So far the Council has admitted to wasting £100,000 of tax payers’ money on having to re-run the selection process. But the longer this urgently needed project is delayed the greater the cost this will ultimately have on our local economy. In the end I fear we could be losing out on tens of millions of pounds because of this mistake.”