Local authority powers to participate in external organisations
Produced in partnership with John Atkinson
Local authority powers to participate in external organisations

The following Local Government guidance note Produced in partnership with John Atkinson provides comprehensive and up to date legal information covering:

  • Local authority powers to participate in external organisations
  • Overview
  • The general power of competence
  • Commercial activities and trading powers
  • Working in partnership with the NHS
  • Constraints
  • Public procurement
  • State aid
  • Governance arrangements
  • Future direction


Collaborating with external organisations is not a new concept in local government. However, in recent years, it has become increasingly necessary for local authorities to engage in a wide variety of different partnership arrangements. It is difficult to summarise these succinctly but they include the following:

  1. The Commissioning Council—where the local authority discharges most of its functions through external organisations

  2. Strategic Partnerships—where the local authority enters into an arrangement with an external provider to deliver certain prescribed functions, usually referred to as 'back-office functions'

  3. Local Enterprise Partnerships—where local authorities and businesses work together to decide what the priorities are in the area for infrastructure

  4. Shared Services—where two or more local authorities collaborate to deliver functions jointly

Since 2010, local authorities have been encouraged by the Government to establish mutuals as a means of service delivery, as these have been seen as more innovative and productive than delivering services in-house.

What these various arrangements have in common is that the local authority delivers some of its statutory services in collaboration with or through another organisation.

The purpose of this Practice Note is to summarise the powers that enable local authorities to instigate or participate in such external organisations, including collaborating with other public bodies, and to identify the constraints that may apply or limit their capacity to do so.