A local authority General Power of Competence

The Scottish Government provided a commitment to explore a general power of competence for local authorities in Scotland.  The 12-week public consultation, which closed on 31 March 2025, was designed to establish:

• The perceived barriers, risks and limitations of existing legislative powers.
• What functions, beyond those already conferred by statute, local authorities in Scotland wish to pursue and whether new legislation or amendments to existing legislation would best deliver those additional functions. 
• The continuing reluctance in England, Wales and Northern Ireland to rely on a General Power of Competence and how best to ensure the effective framing of similar legislative powers in Scotland to provide clarity and confidence to local authorities in the use of such powers.
• How best to ensure that legislation contains the right balance of flexibility and control to mitigate risks arising from greater financial freedoms and maintain transparency and accountability to tax payers.

The consultation response analysis report was published on 30 June 2025 and provided an overview of the range of responses received to the questions asked in the consultation.

Local Authority Aspirations

Local authorities have expressed a desire to expand service provision to:

• Increase revenue by charging for additional non-statutory service provision
• Respond to gaps in the market or in other public service provision which the local authority is well placed to respond to, such as in the areas of enhanced educational support programmes, additional social care services, and ancillary health care services.
• Support national priorities, such as housing asylum seekers.
• Innovate in areas such as green energy, commercial property ventures, retail and hospitality ventures, hotels and other accommodation and tourism, financial services such as loans and mortgages.

The consultation proposed various approaches for consideration, which reflected the possibility of either:

1. Retaining the existing statutory framework without change.
2. Widening the scope of existing legislative powers whilst retaining appropriate controls to mitigate risk.
3. Introducing a General Power of Competence.

Ultimately, the consultation did not deliver a definitive preference for the next steps. Only a third of respondents expressed a specific preference for the introduction of a general power of competence, whilst the remaining respondents were divided between those open to alternative legislative options and those who opposed greater legislative freedoms.

We have given careful consideration to the range of legislative barriers and limitations described by local authorities and their partners within consultation responses, the perceived benefits of a general power of competence and the concerns expressed by other stakeholders in relation to public accountability; increased risk to public funds; lack of alignment with the wider public sector reform agenda; and potential for statutory services to suffer as a consequence of the pursuit or prioritisation of revenue generation agendas. 

The Scottish Government is committed to serving the public interest, to ensuring transparency and accountability and to providing assurance of the continuing prioritisation of the core statutory services for which local authorities were created to provide.

Primary legislation options, which could be introduced within the next parliamentary cycle, are being considered, to strike a balance between providing sufficient empowerment and flexibility for local authorities to innovate whilst protecting core public services and ensuring that local authorities remain transparent and responsive to their communities.

Recognising the need for local authorities to innovate and pursue transformation at pace, in order to ensure the ongoing viability and sustainability of core public services, the Scottish Government also intends to introduce interim measures, via statutory instrument, whilst consideration of primary legislation is ongoing, to expedite greater empowerment for local authorities to:

• Have freedom to supply goods and services to any person and to generate revenue from such services.
• Pursue innovation and transformation with confidence by extending the meaning and scope of the ‘power to advance wellbeing’ to provide greater freedom and certainty for local authorities to act.

Statutory guidance will be published to accompany these amendments to provide clarity as to the intended scope and use of these provisions.  Due consideration will also be given to ensuring effective transparency and accountability to the public.