Local government minister Grant Shapps yesterday promised to push the Treasury to relax its grip on local bodies' financial activities.
In a question and answer session at the National Regeneration Summit in London, Shapps said that he would "ask the Treasury for more flexibility" in areas such as prudential borrowing.
He said: "I think local authorities have the ability to put together sensible schemes and do extraordinary things."
He also told the audience that he already had anecdotal evidence that the government’s financial incentives for councils to allow new housebuilding were taking effect.
The Conservatives have pledged to match the council tax for each new property in a local authority area with an equivalent contribution to the council for the six years after the house is built.
Shapps said: "Major developers have told me that local authorities are starting to work with them because they realise that their finances depend on it".
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