Parliamentary orders on the contracting out of tax billing, collection and enforcement and of investment functions passed through the House of Commons unopposed by Labour because neither forces councils to put the work out to tender. But shadow local government minister Hilary Armstrong said: 'We are anxious the government does not use them as a means to compulsion via the back door. Compulsion has not worked in local government.'
Ms Armstrong questioned whether there was any link between the new powers and the DoE's tough new CCT proposals.
But environment minister Sir Paul Beresford said: 'The measure has been out for discussion for 18 months and the local authority response has been almost blank.'
Sir Paul assured Ms Armstrong that contractors would be bound by the Data Protection Act.
Councils wishing to contract out investment functions will only be allowed to engage qualified contractors. Investments must be approved under the Local Government and Housing Act 1989.
But police, fire and passenger transport authorities will be denied the investment delegation powers, an exclusion Ms Armstrong described to LGC as 'a nonsense'.