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New trading freedoms could change the face of direct services, but councils have a battle to convince civil servant...
New trading freedoms could change the face of direct services, but councils have a battle to convince civil servants they can be trusted, contract service managers say.

At the Association of Contract Services Chief Officers conference in Durham last week, general secretary Ossie Dodds said clause 15 in the Local Government Bill would allow for trading restrictions to be lifted, but only on a case by case basis, with approval needed from the environment secretary.

'We certainly want to see this go further. They want to provide it carefully rather than open the floodgates with all the risk that may potentially follow,' Mr Dodds said.

Even limited freedoms would be a useful first step, allowing private sector joint ventures, staff secondments and better integrated services, he said. The crucial thing in taking up new powers was that councils did not lose money and block the way for others.

Bedford BC commercial services director Shaun Field said last year's headline-grabbing losses in Scottish DLOs had not helped the lobby for greater trading powers.

'I think the government is having very, very deep thoughts about whether we can trade.

I'm not convinced they'll go ahead with the clauses that will enable us to work with the private sector.'

Around 60%-70% of Bedford DSO's turnover came from external trading, but though frequently approached by potential private sector clients, it had to turn them away.

Vince Gilbert, managing director of Norfolk CC's highways contracting, said the council had just set up a ground-breaking£12 million a year joint venture with contractor May Gurney.

To protect themselves, it was essential DSOs knew exactly what their primary powers were in trading. There was no joint liability or guarantees, and EU procurement law had to be followed 'very precisely'. 'We can't work for the private sector - we all do to a limited extent, but you know when you're pushing at the margins,' he said.

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