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COUNCILS TO CALL FOR MORE FINANCIAL FREEDOM

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The Local Government Association will today tell chancellor Gordon Brown that councils will be able to meet his dem...
The Local Government Association will today tell chancellor Gordon Brown that councils will be able to meet his demands to deliver asset sales of£2.75bn a year but that they want spending rules to be scrapped to allow local authorities to keep all the cash they raise.

Mr Brown last month said he wants£4bn annually over the next three years to be raised from asset sales with local authorities contributing the lion's share with only£1bn due from the privatisation of central government assets.

The Independent reports (p7) that the treasury wants councils to sell off swimming pools, recreation centres and high street offices.

A treasury source said: 'They have plenty of assets in development land, the high street and recreation centres they could raise money on. We are telling them to go ahead with the sell-offs.'

In the association's own white paper, the LGA will tell Gordon Brown to end the system under which non-housing assets are split 50-50 with the government, and 75% of money from council house sales repays debt.

However, the treasury is worried that relaxing local authorities' spending restrictions could lead to more inflationary pressure, but councils will argue that they will be prudent, and the economy needs the boost they could bring, particularly in construction jobs.

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