Councils in England will have the right to adopt a four-day working week after the government dropped concerns raised by the Conservatives when they were in power.

For more than a year, South Cambridgeshire district council has defied Conservative opposition to its policy to introduce a four-day working week, after a controversial 15-month trial indicated in March that the performance of its workers mostly improved or remained the same, while the council simultaneously saved more than £370,000 in a year.

The Labour government has decided not to reissue a “best value notice” that was sent to the Liberal Democrat-led council by the Department for Levelling up, Housing and Communities in November 2023 and March 2024. The notice warned the council the government had concerns it was failing to comply with its legal duty to provide a continuously improving service for taxpayers, forcing the council to submit about 200 pieces of raw data to government every week.

These concerns have now been dropped by the newly named Ministry of Housing, Communities and Local Government, which said on Friday that although it was not government policy to support a “general move” to a four-day working week, councils were “rightly responsible for the management and organisation of their own workforces”.

Transport for London is drawing up plans to allow tube drivers to begin working an average four-day week next year.

TfL has told the Aslef union it will share an initial proposal for an average four-day working week in January, according to a letter seen by the BBC.

Last Tuesday, the tube drivers’ union called off two days of strike action over pay.

The decisions were welcomed by the 4 Day Week Campaign. “A four-day week with no loss in pay is a win-win-win,” the director, Joe Ryle said. “With 50% more free time, [it] gives people the freedom to live happier, more fulfilling lives.”

He said the South Cambridgeshire trial had shown that workers on four-day weeks were happier and the council found it easier to employ permanent workers in “hard-to-fill roles”, which was why the experiment had saved the council hundreds of thousands of pounds.

The trial, involving about 450 desk staff plus refuse collectors, found:

• Staff turnover fell by 39%, helping save £371,500 in a year, mostly on agency staff costs.

• Regular household planning applications were decided about a week and a half earlier.

• Approximately 15% more major planning application decisions were completed within the correct timescale.

• The time taken to process changes to housing benefit and council tax benefit claims fell.

Ryle said the deal struck between Aslef and TfL was “a big win for tube drivers and passengers alike. Happy, healthy, experienced drivers are exactly what we need on the tube,” he said. “The nine to five, five-day working week was invented 100 years ago and is no longer fit for purpose. We are long overdue an update.”

The leader of South Cambridgeshire district council, Bridget Smith, said the trial results painted “a really positive picture, with many of our services improving. This was along with the hundreds of thousands of pounds of taxpayer money we saved, improved recruitment and retention, plus incredibly significant positives around health and wellbeing.”

TfL has said there would be “no reduction in contractual hours” and that any changes would need to be “mutually beneficial, preserving or improving the reliability of our service for our customers and improving efficiency”.