Public Services Management: No shedding tiers without shedding tears - Councils are fighting for survival as a shake-up looms for local government, Paul Gosling reports

ALL THREE main political parties broadly agree that the present organisation of local government - single tier in London and the metropolitan areas, two-tier elsewhere - is messy and inefficient, and should be replaced by unitary authorities.

At one stage it was assumed that these unitary councils would be based on the existing districts. However, some county councils have been lobbying hard for retention and may survive. There is even the prospect that in some areas two tiers of local government will stay in place, much as at present.

It is generally accepted that the 1974 local government reorganisation took a messy situation and made it worse. Only the most politically aware of voters knows which council services are provided by which council, a problem made worse by concurrent powers - some facilities such as sports halls may be provided by either a district or a county council, or by them jointly.

The job of the new Local Government Commission - chaired by Sir John Banham, retiring Director-General of the CBI, and formerly Controller of the Audit Commission - is to streamline the operation of councils. It will draw on such matters as historical and community identity, but will concentrate on creating a system that offers good value for money. Wales and Scotland are being treated separately, and the Secretary of State for Wales has already announced the creation of 23 unitary authorities to replace the existing eight county and 37 district councils. The Scottish Office has completed its initial consultations, and is considering the future of local government there, prior to producing detailed proposals later this year.

The first tranche of English counties to be examined by the Commission include the notoriously artificial 'counties' of Avon, Cleveland and Humberside, and also the Conservative Party's bete noire, Derbyshire, raising expectations that the Commission will at the very least recommend the abolition of these four counties.

Nevertheless, the initial mood for scrapping all counties has subsided with the replacement by Michael Howard of Michael Heseltine as Secretary of State for the Environment. Furthermore, the Treasury has made it clear that reorganisation should lead to maximised savings, which the county councils' economies of scale are best placed to provide.

It is expected that in some counties, such as Cornwall, the two-tier structure will survive. Sir John Banham gave an indication of his attitude on BBC Radio's Any Questions recently, saying: 'I think we usually find that most reorganisations cost more, deliver less and are generally a great disappointment. I think that there are some opportunities to improve things and we should do that, but only where the case for change is very clearly made. I never like proposing solutions to problems that don't exist and I think we need to look very carefully and only if there's a really clear problem should there be any changes.'

It is the consultants who stand to benefit most in the short term from the Commission's remit, with district and county councils desparately competing in their attempts to survive, and preferably take on new powers. Even where the two tiers are controlled by the same political party it is common for each to seek consultants' support.

KPMG Management Consulting produced for the Association of District Councils (ADC) a comprehensive guidance manual for districts to use to plan their proposed corporate management structures as unitary authorities. Eddie Oliver, KPMG's partner in charge of public sector consultancy, said: 'We gave some thought about the state of local government in a unitary area. We looked at some alternative models, and produced a set of building blocks to enable an authority to see what sort of structure it needs. The structures have to be flexible.'

Despite an aggressive role taken by the ADC in arguing for districts to be given unitary status, county councils have not helpfully rolled over and died. Westminster Strategy have been working for the Association of County Councils as political lobbyists to put pressure on the Department of the Environment to be more favourably disposed to the counties. They feel they have been successful. David Robertson of Westminster said: 'The main thrust of the counties has been that there should be more emphasis on costs, and the costs of any reorganisation will almost certainly outweigh the benefits. If there is a presumption of unitary authorities then the counties are the best placed to do this.'

Surrey County Council argues that it would make a far better unitary authority than would the districts. Michael Jones, Surrey's assistant chief executive, said: 'We remain to be convinced that a complete reorganisation is worthwhile. We are not in a 'kill the districts' campaign.

'We looked at the possibilities, of the districts being the only authority, or the county, or keeping it two-tier, or of breaking up the county into two or three authorites. Our aim is to ensure that all services remain under local government control, not handed to joint boards or to the civil service, but not to be remote. Our model involves all councillors being elected as local councillors, to sit at local levels to look at local issues, such as planning matters, some of whom would sit on county- wide strategic boards, such as those for the fire service.'

Mr Jones and Westminster Strategy stressed that abolition of county councils would lead to many joint boards, which are undemocratic. The Association of London Authorities made a similar point about the lessons to be learnt from the abolition of the GLC. A spokeswoman said: 'It threw up a lot of problems, which have still not been resolved, even things like who controls the traffic lights. Neighbouring boroughs have to get together to sort things out. Some powers were taken away from local government, control of trunk roads went to the Department of Transport, control became more centralised. There were so many little things that people hadn't thought of. Seventy joint boards had to be established to sort things out.'

Surrey made the additional point that some services could be devolved to parish and town councils, which is also being considered by other counties.

Predictably, the district councils in Surrey, such as Guildford, are not too happy with the county's proposals. They now find themselves fighting for survival. Robin Newton-Syms, Guildford's public relations and marketing manager, said: 'We believe we have all the requisites to be a unitary authority. It will free us up and allow us to get on with things.'

Not that all existing districts necessarily want unitary status. There are reports that in some areas councillors on smaller districts privately dread the prospect of taking on extra responsibilities, such as social services, libraries and education. However, the days seem to be numbered for councils acting as direct providers of any services. With local government in such a state of flux there are strong question marks over whether this is the right moment to proceed with both reorganisation and the extension of compulsory competitive tendering (CCT) to professional and technical areas. The Audit Commission has made representations to the Department of the Environment expressing concern over whether the two processes can be handled simultaneously by local authorities. It suggests the latest CCT legislation be delayed in implementation, saying: 'It would be a waste of scarce management resources if authorities were required to prepare for the extension of CCT and then to find that they had no future.'

Similarly, with the strong push towards local authorities as enablers it would appear that the successor authorities will create organisational structures that will be subject to ongoing review as more operations go to external contract.

The process for replacing existing councils with their successor authorities has not yet been decided. It is understood that one option being carefully considered by officials is creating parallel or 'shadow' authorities for a year prior to the successor councils becoming functional. During this year councillors for the new authorities would appoint chief officers and approve organisational structures.

It would be an irony if the attempt to remove the confusing two tiers of local authorities led in the short term to an extra 'shadow' authority, operated by councillors and officers without providing any obvious benefit whatsoever.

(Photograph omitted)