With compulsory competitive tendering due just 18 months after reorganisation, the society warns that the emphasis on co-operation and safeguarding jobs, which characterised the 1986 reorganisation of metropolitan areas, is unlikely to be repeated.
'It is almost certain that . . . new authorities will think hard about taking on responsibilities which might within 18 months make them uncompetitive,' it said in a report on lessons to be learnt from 1986.
The report, which draws on the experiences of a range of managers from the public and private sector, highlights major pitfalls councils must avoid.
'The circumstances surrounding the winding down of old authorities are more likely to encourage lack of control, and the dangers of an individual exploiting this are clear,' said the report.
It suggests the proposals adopted by some authorities in 1986 for the disposal of equipment 'did not stand up to the kind of audit scrutiny to be expected in more normal circumstances.'
The report says the 1986 review was characterised by a variety of approaches, and recommends looking at a range of options before deciding on how to tackle the coming reorganisation.
Managers should get together now to draw up inventories of software and equipment so the ownership and leasing arrangements are clear, according to the report.
It warns a failure to work together will be exploited by suppliers.
'Suppliers will recognise divisions and tensions within and between authorities and will surely try to turn them to their advantage.'
The perils of ignoring staff morale are also highlighted. The study says the experiences of at least two councils in 1985 showed that staff often react to uncertainty by leaving their jobs.
Winding down old systems in 1986 took between 18 months and two years, according to managers interviewed for the study. The society says that with the rapid expansion of IT systems in recent years the run-down this time round is likely to take longer.
'This will put a premium on experience of current systems,' it said. 'Those thinking of early retirement might just be welcomed back the day after reorganisation, to continue the support of key systems.'