The Local Government Group could take over management of national and regional trading standards enforcement in what is seen by ministers as a test case of the sector’s ability to manage devolved Whitehall activities.
LGG executive members are to discuss how it could take over arrangements run through cumbersome contracts with the Department for Business, Innovation and Skills.
Regional and national trading standards work covers fields such as large-scale rogue traders, loan sharks and animal disease control.
Councils have long worked in groups on these tasks, for the last five years with financial backing from BIS.
But BIS contracts have carried detailed central prescription and led to a plethora of separate governance regimes.
A report to the executive said: “Both BIS ministers and [Cabinet Office minister] Francis Maude see this is one area where they can divest ‘control’ to local government as a whole to test whether we can deliver against this type of agenda.”
Confidential soundings indicated the government would transfer up to £15m to LG Group to cover costs, it added.
BIS secretary Vince Cable said in October that he intended to “shift almost all relevant central government funding for consumer bodies”, to trading standards or the Citizens Advice bureau with “trading standards given responsibility for enforcement of almost all consumer law”.
The Trading Standards Institute expects a government consultation in January on this transfer of work, most of it now performed by the Office of Fair Trading, such as prosecutions of nationwide scams.
It is keen to take on the work but wants sufficient money to follow it into local government.
TSI present Baroness Crawley wrote to council chief executives last month asking for their “extraordinary consideration” for trading standards when making cuts.
Andy Foster, TSI director of operations, said councils needed a mechanism to avoid being hit with heavy legal costs if they lost cases that the OFT now takes to court.
“Would some risk-averse council take action if there were the risk they would lose the case and face costs”, he asked.
Trading standards officers are also concerned about the future of the Consumer Direct helpline which they provide under contract to the OFT.
Ministers have proposed that this should move to the Citizens Advice Bureau.
“That is not a problem itself but would be one if it meant we were cut off from the market intelligence we get from that,” Mr Foster said.