While complete central government
control of local government remains an unlikely scenario, these powers will be used in other councils in New Labour's pursuit of improved public services.
Other councils are already in the frame for intervention, though not on the same scale as Hackney.
Walsall MBC, which has had an unfavourable corporate governance inspection (LGC, 28 September), has been forced into an education private finance initiative, and it remains to be seen what the outcomes of future corporate governance inspections will be. Local government secretary Stephen Byers stepped in at Hackney after it had undergone its second such inspection.
Hillingdon LBC is the only other council to have undergone such an inspection in the first tranche, but six more councils will be inspected under the regime in the second tranche already under way. These are Bristol City Council, Bromsgrove DC, Corby BC, Enfield LBC, Mendip DC and Rotherham MBC.
The Audit Commission emphasises, however, these councils are not necessarily undergoing these inspections because they are failing.
'Most often councils would volunteer for a corporate governance inspection, so if a council is on our list, it doesn't mean it is bad. Having said that, it means that, in a fair number of cases, there are one or more problems. But we don't want it to have a
stigma. For example, Torfaen CBC wants a
corporate governance inspection for exactly the opposite reason - it's done a lot of good things and wants external accreditation of that,' says an Audit Commission spokeswoman.
Torfaen will be inspected in either the third or fourth tranche, which will take place at the beginning of next year.
But what are the directions issued by
Mr Byers? In Hackney's case five government departments have issued directions requiring service improvements in education, social services, waste management and housing benefits and to balance the
Each department has set a tight deadline for action to be taken. The education target requires the council to transfer its education services to a third party, which is a new trust (LGC, 26 October). It has to be in place from 1 August next year.
The plan for improving waste management services has to be produced by 15 November; social services has to prepare proposals for carrying out two best value reviews by 30 November and an agreed budget strategy must be ready the same day. The backlog of housing and council tax benefit cases outstanding at 19 April must be completed by 31 December.
Other areas in which the DTLR wants to see action by the end of this month are the recruitment of personnel, procurement and contract negotiation, and proposals for a best value review of accommodation and property management.
Issuing the directions (LGC, 21 September) Mr Byers said: 'The government is simply not prepared to let the present situation continue. It is unacceptable that people who live or work in Hackney should have to suffer poor services because of the council's corporate failure. The package of measures is designed to protect and improve the key services and ensure the council tackles its budget deficit.'
But what the outcome of these directions will be no one quite knows. The aim at Hackney is for improved services which can once again be subject to the best value process. But the next step is not clear.
Director of law and probity at Hackney, Claer Lloyd-Jones, says: 'It's very
much a learning experience for everyone, including the DTLR. The directions are
about getting services back into the best
'We have to comply with the time-scales of all the directions, and the output of that needs to then be considered by relevant secretaries of state. What will happen then we don't know.
'But the key issue is the dialogue between us and the departments - it will not work if it is adversarial.
'There is obviously a massive resourcing issue and it's too early to say if the result of all the directions working together is going to be contradictory. If they are, we would seek to find a way through it.'
According to the DTLR, after the deadlines are met the progress of the services will be subject to continual monitoring by the Audit Commission. The DTLR will take its next step from the Audit Commission 's recommendations.
A DTLR spokeswoman says: 'We're really quite keen on Hackney concentrating on delivering. If it becomes clear that some of those things aren't happening we'll have to reassess in the light of what the Audit Commission says.'
The model will be an interesting one to watch because of the likelihood of others finding themselves in the same position.
Ms Lloyd-Jones adds: '[My job is] the most exciting legal job in local government because what's happening now could be happening to other local authorities shortly, and to have the opportunity to get it right in Hackney is completely unique.
'I think it would be very surprising if the use of the legislation stopped at Hackney, because there are good bits about all local authorities and bad bits. There are lots of reasons why local authorities are failing in some service areas.'
The learning curve will be steep for all involved, but the delicate process must be perfected if there is to be intervention in
other authorities without damaging relations between central and local government.