Under new rules councils will be able to spend any revenues they generate from selling surplus assets on public services, communities minister Marcus Jones announced today.

Chancellor George Osborne said in last year’s Autumn Statement there would be changes to the rules governing the use of ‘capital receipts’.

As a result of these changes local authorities will now be able to sell surplus assets — such as property or shares and bonds — and use the money to fund, for example, children’s services or trading standards.

This will begin on April 1 and last for a three-year period.

The move is a part of the government’s strategy to phase out local government grants by 2020 and to replace them with revenue raised locally.

Marcus Jones said: ‘The devolution revolution and historic 4-year local government finance settlement means that councils can now plan budgets with security. These new rules will further incentivise local authorities to plan out the best financial future.

‘They will be able to sell off their surplus assets in order to make additional resources available and make efficiencies to improve services that really matter to local people.’

Councils will be required to develop a dedicated strategy document to go alongside their annual budget which will list each project that plans to use the new revenue.