He was interviewed on BBC Radio Four's Today programme following a feature looking at the Liberal Democrat's record in Somerset CC, one of the 55 local authorities it controls.
Mr Beith said the party's local government record was 'an important part of the picture of Liberal Democrats in action'.
He added: 'Obviously, ideally we would like it to be set against the background of the incredible restrictions that now exist on local authorities. The amount of freedom of manoeuvre that a local authority has is extraordinarily limited in a country where the precise amount of money you are allowed to spend on things is determined centrally - a hopelessly over-centralised system.'
'But remember we also believe very much that people should respond to local circumstances and handing power to local communities where decisions will be different', added Mr Beith.
He said having in conference debates people who controlled large budgets for education and social services and employed teachers and local government staff, had changed the character of the party assembly. People understood the importance of working within budgets and of efficiency, but the party was no less radical in areas where it had freedom of action.