Often portrayed as jobsworths out to pick holes in residents' loft conversions, councils' building control officers are actually responsible for overseeing cutting-edge projects.

Which part of local government is in daily competition with the private sector, dealing with everything from the largest companies down to paint-spattered contractors given to saying things like "Bloody hell luv, what cowboy put that in"?

The answer is building control, which has faced competition for almost 25 years, yet claims a 70% market share that includes some of the country's best-known construction projects. It is the council department called on when something needs to be built, whether it is a domestic loft extension or the new Wembley Stadium. Recently, a lengthy 'consultation on a consultation' led to the publication of government proposals to reform building control.

Paul Everall, chief executive of Local Authority Building Control (LABC), is in favour of the proposals, which could see officers gain greater powers to enforce building regulations and more time to deal with the worst cases.

"The proposals will allow our inspectors to issue stop notices and even impose fixed penalties when they find poor or dangerous work on sites," Mr Everall says. "Planners and health and safety officers can do that, and so should we."

The government also proposes giving officers two years, rather than the current six months, to take errant builders to court. Mr Everall supports a move to risk-based assessment, where builders with a record of meeting building regulations would have fewer inspections than unknown practices or those with poor form, although he admits that this policy needs fleshing out.

Building regulations, which are issued by the government, are not a matter of ticking boxes. They specify outcomes but, given the great differences in design, materials, location and purpose of buildings, leave a lot of scope for how results are achieved, so require professional interpretation.

LABC is both a technical organisation and a national marketing body for councils, whose building control departments must be self-financing and run a separate trading account. Officers are in many ways at the cutting edge of council trading.

They therefore get rather irked by the stereotypical view of them as people in grey suits who periodically emerge from town hall cellars bearing clipboards and theodolites to dispute residents' intentions towards their lofts.

LABC business development director Phil Hammond says: "Even people in local authorities fail to recognise that we are the only part of local government that competes directly with the private sector.

"It is not true that all we do is small householder work. Councils did the Wembley and Emirates stadiums, are involved with the London 2012 Olympics and major regeneration schemes, and have partnership arrangements with major retail developers such as Asda, Sainsbury's and Marks & Spencer."

These partnership deals perhaps show LABC at its most entrepreneurial as they exploit the commercial possibilities offered by councils' ubiquitous presence. One council partners a developer nationally, carrying out checks on its designs and their conformity with building regulations, and representing them to all the councils in whose area the project will be built. This gives the developer an attractive economy of scale by putting all its design work through one council partner, with only site work inspected by the council that governs the project's locality.

A similar service operates for volume housebuilders. Mr Hammond explains: "If a builder has a design that it replicates everywhere, LABC can approve it and the local council then inspects it only to make sure it is built okay. The builder does not need reapproval each time from scratch."

The largest building control service is at Birmingham City Council, which, in the partnering spirit, is rather unexpectedly active in Bristol. This came about, explains head of building consultancy Trevor Haynes, after his department worked with retail developer Hammerson on the revamp of Birmingham's Bullring shopping centre.

"Hammerson liked what we did so much that it asked us if we would work with it on the Broadmead regeneration project in Bristol," he says. "I spoke to colleagues at Bristol who were delighted since it meant they did not have to start from scratch and we could work with Hammerson on designs while they did the inspection."

Birmingham is the partner authority for all of Marks & Spencer's developments, a relationship that also arose from the Bullring project, and for developer Bovis Lend Lease on a Ministry of Defence project to provide single accommodation at armed forces bases across the country. Closer to home, Mr Haynes says the Birmingham team works "hand in glove with colleagues in regeneration and planning on the city's ambitious programme".

He adds: "This integrated service attracts developers as they can talk to us at an early stage to ensure their buildings meet regulations. It is where the one-stop shop approach really counts."

Further south, Brent LBC building control director Andy Hardy found himself up against serious competition when he sought the contract to provide building control for the redevelopment of Wembley Stadium.

"It was a hard sell against the private sector but we put together a service-level agreement and it took us six months to agree terms," he says. "I put together a dedicated team of two engineers and two surveyors, and had to recruit two extra people to cover other work, but we did it all ourselves except for using a fire safety consultant."

Mr Hardy adds that because Wembley's design was cutting-edge, it needed "a lot of professional judgment of how to interpret the regulations".

At the other end of the scale, he has sent his surveyors around the borough to "make enquiries at each skip on their patch" and check whether builders had understood a change last year that brought electrical and re-roofing work within the regulations. They found some 140 projects that lacked the necessary building control approval. "We recognised it would be a challenge to educate the industry," he says.

The regulations have changed often, a perennial grievance for inspectors and builders alike that could be put right under the government proposals. LABC's Mr Hammond says: "Over the past couple of years there has been a large amount of new regulations on fire, acoustics and energy. It is non-stop from the Department for Communities & Local Government, which does not provide building control with the money to train either our staff or contractors."

In theory, building control fees paid to councils are ring-fenced, but "some councils avoid that by increasing the overhead charged", Mr Hammond says. In some cases, LABC will intervene, since it markets a national service. "We cannot have our network degraded because a chief executive somewhere wants to plunder the fees," he adds.

Housebuilders suspicious of LABC

Housebuilders remain somewhat suspicious of LABC; it was after all their lobbying that opened the service to competition.

Home Builders Federation technical director Dave Mitchell says LABC has been unable to invest to attract enough new workers because its fees go all over the place and are not reserved for the profession. The government wants a 45% increase in home building to 240,000 a year by 2016. He says this means 45% more of everything, including building control approvals. "I think there will be quite a shortage of inspectors," he adds.

Mr Hammond retorts that some housebuilders "would probably like a world with no regulations or standards, and their critique of LABC is quite wrong".

He adds: "For the past 15 years the building industry has been an Eldorado. There has never been growth like it and everybody has grown to meet that. We have recruitment routes for school-leavers, graduates and trades-people. We are not people in grey suits who live in the town hall cellar, which is the image our competitors like to paint of us."

Despite being a commercial service, building control does not lose sight of its public service role. Birmingham's Mr Haynes says: "The private sector thought it would win all the work from us, but it has not done so.

"People like to deal with us because we are impartial, and working in the public sector means I can be concerned with doing a good job, not just profit."