Shadow home secretary Nick Clegg and shadow environment secretary Chris Huhne are contesting the leadership following Sir Menzies Campbell’s resignation last month. The result is due on 17 December.
Mr Clegg said he wanted to “think afresh” about how services are funded and delivered, but said the transfer of public services to social enterprises and voluntary bodies “must never be a blanket measure, as suggested by some Conservatives”.
Mr Huhne said local control over decisions was much preferable to a top-down directive from Whitehall “that we will all adopt one system, according to the latest public sector management fad of the moment”.
He said Britain needed to “give communities the tools they need to preserve and improve the quality of their citizens’ everyday life”.