A London council is considering proposals that could lead to its obese residents having their benefits cut if they don't take exercise.

A new report by think tank the Local Government Information Unit (LGiU) recommends cutting welfare pay-outs for the obese if they refuse to exercise.

The report - 'A Dose of Localism: The Role of Council in Public Health'- was commissioned by Westminster City Council (WCC) and explores ways that local authorities can improve public health now that responsibility for it has been transferred from the NHS to local government.

It says that GPs should prescribe exercise as a cure for certain health problems and that councils should reward residents who take it, whilst punishing those who refuse to work-out with cuts to their housing benefit and other welfare payments.

The report's author, Laurie Thraves, told The Huffington Post that it wasn't "about penalising anyone". He said: "The real thrust of the report is to provide incentives to people who want to get fitter. There's a lot of evidence to show incentives, not penalties, are the way forward. This is about rewarding people who are making a positive change.

"We don't want to make obesity the be-all and end all [to public health] there's a range of other suggestions there."

However, Westminster Labour Group Leader, Councillor Paul Dimoldenberg, slammed the proposals. He said: "This is a typical stunt by WCC, without a thought as to how it could be implemented. It seems a ridiculous proposal which will penalise the poorest.

"Has WCC talked to local doctors about this? Are local doctors really going to sign up to a system that will penalise their patients?

"The proposal clearly hasn't been thought through, and it typical of this Conservative-led council's shoot from the hip, headline-grabbing tactics."

The report also recommends tackling overcrowding by utilising public space. It acknowledges that overcrowding has a significant adverse impact on the physical and mental health of both children and adults.

The homelessness charity Shelter, says the report, has found that overcrowding is linked to respiratory and infectious diseases, common mental health disorders, developmental delays and lower levels of educational performance.

Yesterday it was revealed that the secretary of The Department for Communities and Local Government's snack bill rose by £10,000 in 2011. The Department's chief, Eric Pickles, had previously recommended that council's could save money by cutting biscuits and other snacks from meetings.

The report's key recommendations are:

1: Innovate. Councils should design innovative services that embed the public health approach across service areas. Examples include:

• utilising public space to tackle overcrowding 
• better planning of public services to improve health and wellbeing reducing licensing red tape for smaller, non alcohol-led venues to encourage a more responsible approach to drinking
• improving employee and customer health by promoting higher quality services in local shops
• prescription of leisure activities to raise activity levels
• linking welfare measures to behaviours that promote public health.

2: Show who benefits from invest to save. Public health analysis, in addition to establishing an objective picture of need through documents such as the JSNA, needs to build on the community budget pilots to provide more robust cost benefit analysis of actions that deliver longer term savings from early intervention and preventative action and where future benefits accrue.

3: Recruit and develop community commissioners. There is a growing recognition that community input in decision-making can help promote health outcomes. However, the key to realising these health gains is giving communities real decision-making power. One option is to employ community commissioners.

4: Identify and build on success. Bottom-up approaches cannot be “planted” by councils. Local authorities should instead focus on strengthening pre-existing networks in communities that could play a role in delivering services.

5: Councillors as community leaders. Ward councillors are the direct link between the local authority and the community. They are best-placed to encourage people to get involved in improving public health outcomes.