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Environment minister Tony Baldry looks likely to relax restrictions on direct labour organisations that prevent them from bidding for work with other local authorities.He told an Association of Direct Labour Organisations conference in Chesterfield that he was 'not unsympathetic' to complaints about rules that effectively limit DLOs to working for their own councils.This means that DLOs can lose contracts to the private sector, but have no way to expand their market.Mr Baldry said: 'I don't think anyone has argued that the private sector is inherently more efficient than the public sector.'And he did not rule out the possibility of DLOs competing for private sector work, as long as they did this by using spare capacity and did not risk public money.Mr Baldry said next year's reorganisation of councils' boundaries and roles would mean a rethink on the rules for DLOs.The most likely change is that groups of councils could operate a joint DLO, or that one council could do building or highways work for its neighbours.But DLO managers see Mr Baldry's comments as an unexpected opportunity to press for expansion of their operations.Leading DLO consultant Jonathan Swallow said: 'It is a very interesting change with a lot of possibilities for us to follow, but I don't think they are looking to give DLOs powers to work for private clients.' CONSTRUCTION NEWS