Casting off its image of industrial decline, Newcastle is now experiencing its own feel-good factor. Paul Gosling meets the city council's young new chief, who aims to blend radical management methods with a touch of new Labour humanity.

At 37 Kevin Lavery is probably the youngest chief executive of a major local authority. His route to the top at Newcastle City Council, where he arrived two months ago, is one being followed by several other high- fliers in local government. The traditional career ladder took local government officers from councils' legal or finance departments on to the post of chief executive, but some now reaching the top have been policy officers, helping councillors to research and steer through changes in the way councils are run.

Unusually, Mr Lavery assisted two flagship Tory authorities, Kent and Westminster, to implement radical right-wing policies, but is now in charge of revitalising what is seen as one of the oldest of "old Labour" councils at Newcastle. Between times he was a consultant for Price Waterhouse, first to public-sector bodies, then specialising in the pharmaceutical industry.

Mr Lavery says that he is returning home, having been born in Newcastle. Its fine Georgian streets inspired him to study town planning for his degree. His time in policy development and corporate management has, he says, made him a better strategic manager, with more insight into the problems of social deprivation, and the confidence to address the need for improved local democracy. "Very few of the challenges we face can be dealt with by one service alone," he says. "The ability to think beyond a single service or department, across services, is very important.

"We have got to challenge what we have always done in the past, and ask questions like `why did we provide this service at all?', and `why did we do it at this level? - are there opportunities to improve the delivery of this service?'. Again, a policy background can help.

"There are lots of lessons to be drawn from the experiences I have had in those Conservative authorities, more positive than negative. Things like the `one-stop shop' introduced in Westminster, which deserved its Chartermark, and which authorities across the country, of all colours, have copied. Again with the devolved management changes in Kent, which weren't really a party political thing, but were to do with basic good management, which gave management more freedom and held them to account for their results. They provide good lessons for any local authority, irrespective of its political affiliations."

Equally influential was a spell in the United States as a Harkness fellow. "Just spending a lot of time in another country, in a different environment - Los Angeles is very different from Newcastle - helps you to challenge the things you take for granted," Mr Lavery says. "In the US the local government system is much more fragmented. Local government there has much less power than its equivalent in the UK, so they really have to be enabling authorities if they are going to deal with social and economic problems.

"A lot of contracting, particularly in the west of the US, is about contracting with the public sector. There is a big issue there of small cities contracting with the county for police, fire, engineering services. What they are trying to achieve is the benefits of local control, but with the economies of scale.

"The civic leadership takes a much more high-profile approach at local level. It is partly because they have a more vocal culture than we have. Part of the reason is that they are happy to move beyond their own boundaries, in terms of their own services, in a way that we have been reluctant to."

Lessons from US contracting arrangements might be applied in Newcastle. It is among 150 councils to submit proposals to become one of 30 `best value' pilot projects that will enable the Government to determine the details when it replaces compulsory competitive tendering in 1999.

Mr Lavery is enthusiastic about the potential of `best value'. "I have worked in the private sector, and a lot of the time I would not advise a client to go out to competitive tender. It doesn't strike me as best value at all, it is incredibly bureaucratic.

"We have the opportunity for a much more balanced approach to assessing best value - best value in terms of, yes, price, but also the customer's view of the work, and the wider issues of looking after employment in the area." One of the proposed pilot schemes would integrate in part of the city separate environment maintenance contracts, on refuse collection and street cleaning, to provide a better and cheaper service.

"I would like to see Newcastle providing its services in-house," he explains. "Many of the reasons why authorities contracted them out in the first place was to avoid some of the government regulations which were imposed on in-house contractors, so if we can loosen those regulations then hopefully we can achieve many of the benefits with in-house provision anyway. Contractors achieve better value for money for their clients by improving the management of those services - we can do much of that in-house. We are going to have a proper test of efficiency, with best value."

Mr Lavery says that this is a wonderful moment for him to join Newcastle council, as the city is beginning to experience its own feel-good factor. A massive regeneration programme is going on, with parts of both the east and west of the city being rebuilt. Several big corporations are investing heavily in the city, especially as a base for national and European telephone call centres for the financial services sector. "In the 1970s there was always a sense that tomorrow won't be as good as today," Mr Lavery recalls. "That's changed. People are saying `tomorrow is going to be better.' "