All councils in England could have the power to boost their income through trading, under new proposals announced this week. The powers, already available to high-performing authorities, would enable councils to offer services for a fee, such as highways and waste services.

Every council would also have freedom to spend income from environmental fixed-penalty notices, as they see fit.

Local government minister, John Healey, said: ‘Latest research shows that councils make £1bn a year from trading, but only one-quarter of them use this money to supplement their income.

I want to see that change. ‘These proposals could offer councils the chance to capitalise on the things they do best, and to think creatively about how to generate additional income, rather than relying on council tax increases.’

The Government highlights Stockport Council’s own trading company, Solutions SK, which was set up in 2006 to deliver refuse and recycling services and highways maintenance.

Working for both public bodies, such as neighbouring councils and private sector clients, the company has gone ‘from strength to strength, with its turnover almost doubling since launch’.

Communities minister, Sadiq Khan, said: ‘Increasing flexibility on spending and the option to trade – whether providing equipment hire and safety inspection in the fire and rescue service, or councils taking on their neighbours’ waste contracts – could also be a real boost to councils in these tough economic times, and help keep council tax down for residents.’

The new flexibilities would complement the new Comprehensive Area Assessment (CAA) regime, which replaces Comprehensive Performance Assessment (CPA) categorisation. The power to trade is currently available to CPA top-rated authorities. The consultation closes on 28 July.