But the report severely criticised many aspects of Hackney's provision and, although the measures announced by the Department for Education and Employment were more cautious than media leaks suggested, their wording implied the possibility of more governmental intervention.
As it stands, only the schools improvement and language and learning services look certain to be contracted out, with consultants working on proposals for May.
Consultants will also assess the benefits of doing the same with personnel, finance and IT services. Possible contractors are private businesses, not-for-profit organisations and other local education authorities.
It found many services to be 'broadly satisfactory', including the implementation of the National Literacy Strategy, school attendance, behaviour support, exclusions and the provision of alternative education for pupils not on a school roll, and liaison with the health
service and the police.
The services reported to be still unsatisfactory include planning for school improvement, intervention in below-par schools, personnel advice, information and support on school finance and specialist provision for bilingual learners.
The school improvement service was said to be 'bureaucratic, expensive and inept', while the language and learning service was in a
Education secretary Blunkett said Hackney had had ample time to sort these problems out: 'The persistence and severity of the LEA's failure now make urgent action necessary in order to bring the education of children in the LEA's area up to an acceptable standard as soon as possible.'
He said he would ask consultants to consider if other functions should be contracted out.