Lib Dems cash in on sleaze and poor services

"WE are taking our message entirely from Peter Mandelson," according to Stephen Hitchins, Liberal Democrat leader in the north London borough of Islington, "the people deserve better, it's time for a change."

Solid Labour Islington, former home of Tony Blair himself, is under assault, accused of levying excessive council tax, borrowing profligately (Islington's pounds 800m debt is blamed by the Liberal Democrats on the former council leader, now Blairite loyalist MP Margaret Hodge) and badly managing its education and social services.

"There is such a disparity," Mr Hitchins says. "In booming, trendy Islington the quality of services in almost every department is below par." It is a charge being made by the Liberal Democrats across urban England as they position themselves as the principal opponent of Labour hegemony in the big cities. Interestingly, there are some signs that such criticisms are not entirely unwelcome either at Labour headquarters or in Tony Blair's inner counsels.

In Doncaster and Hull, Labour's reputation has been damaged by allegations of sleaze - though whether voters tomorrow will move beyond complaining to vote for the Liberal Democrats is by no means certain. In Liverpool and Hackney in north-east London the charge against Labour is disorganisation - though in Hackney the Liberal Democrats' current 17-strong complement of councillors includes a number of Labour renegades and in Liverpool the strength of the Liberal Democrats owes something to their old association with Protestantism.

There will be a "Donnygate" factor of some kind. Ian Horner, the Liberal Democrat regional co-ordinator for Yorkshire, says: "We are confident of having an increase share in the vote but whether this will translate into seats we don't know. We got a massive swing in Stainforth [where Labour lost a seat in a by-election in February] but replicating that will be difficult. We will be looking to pick up one or two seats and anything more is a bonus."

The picture is similar in Hull where a fortnight ago Labour - tainted by allegations of corruption - lost a seat in a by-election in Boothferry. The victor, Andrea Walker, sees her party picking up a few more - which will do little to dent Labour's control of the council, but would give her party a "louder voice".

What she registers is public discontent with the performance of the council - which is boosted by a feeling that Tony Blair's administration has let people down.

"Hull is coming bottom on league tables all the time - which is the responsibility both of the city and of the county council from which it inherited schools and social services, which was also Labour controlled. People are turning to us as an alternative."

Lib Dem organisation, however, is weak in Labour's Yorkshire strongholds. But across the Pennines they may see gains in cities such as Oldham.

London may give the party its most spectacular gains. According to Stephen Hitchins in Islington, the fact that Londoners will also be voting in the referendum on the future shape of the capital's government will not add much to turn out. The party's best hopes, after Islington and Hackney, are the southern boroughs of Lambeth (where they are numerically the largest party), Southwark and Lewisham.

Yet there are signs that Labour losses, in moderation, would not be unwelcome at party headquarters. "These will be the last elections under the old dispensation," one of Mr Blair's inner circle said yesterday - meaning that next time round party headquarters would have an unbreakable lock on the process of selecting candidates while Labour's plans for "best value" in council services would put the squeeze on less efficient and high spending authorities.

While Deputy Prime Minister (and Hull MP) John Prescott is opposed to proportional representation in local government elections, some of Mr Blair's aides are seeking alternatives to the existing set-up, if only to prevent the kind of one-party dominance it has enjoyed in places such as Doncaster.