Community improvement districts, through which local community groups and residents could run local services, could be a really important development, according to Cabinet Office minister Francis Maude.
The report says: "Without the creation of a new ‘micro’ institution such as a community improvement district, it is hard to see how the big society or localism can get very far in London."
It says the groups would be a new version of business improvement districts, in which businesses have agreed to work alongside the council to make improvements to their local areas.
Maude said: "I strongly welcome this contribution. It could be a really important idea. It is an intelligent response to a problem we haven’t resolved, which is how you enable people to create organisations that are formal enough to carry out this work without stifling them with bureaucracy.
"There will not suddenly be a network of CIDs covering the whole country or the whole of London. We should not worry about that; we should celebrate it because that’s part of localism. Yes, it will be untidy, but we should not attempt to make it too neat or corral it too much."
The report says CIDs would be set up by local residents to run local libraries and open spaces, and could take a crime prevention role. They could also play a role in social care, it says. According to the report, they could be an effective way for local groups to use the community right to challenge set out in the Localism Act.
The report says the groups would have to be democratically accountable and would have a fixed time limit that could be renewed by a local referendum. They would be expected to cooperate with local authorities, it says.
New legislation would have to be passed to allow CIDs to be set up, the report says.
Maude told the event that the big society agenda would be "untidy". He said it was about "opening up public services to more providers and moving away from a model of uniform, monolithic in-house public sector providers of public services".