'At the moment local government has a credibility problem with businesses. They do not see it as a good influence', she told delegates. 'They do not see local government as helping them. They are not clamouring to be elected representatives'.
The rot in local government started in 1601 when it was given social functions under the poor laws, she claimed.
She accepted there should be some public sector functions, such as ensuring there were adequate roads and street lighting. But she believed councils were now in charge of too many services.
Dr Robinson was disappointed the government was only reviewing councils' structure and not their functions.
'There have been too many local government reforms based on piecemeal reviews with too little idea about what government is for', she said.
She said the IoD was not opposed to government but saw its key role as maintaining and defending free markets.
An IoD survey had shown 81% of businesses wanted their rates bills linked to the services councils gave them.
'Businesses cannot be seen as a milch cow for local government', she said. Dr Robinson believed extension of compulsory competitive tendering would improve relations between councils and businesses.