Addressing the John Wheatley seminar in Edinburgh on the future of local government, Mr MacDonald said:
'The existence of a Scottish parliament will undoubtedly have a huge impact upon the nature and operation of Scotland's councils. I know that some currently active in local government are concerned that the new Scottish parliament will act as a centralising body and that it will encroach upon the responsibilities and powers of local authorities. This is not what the government wants to see.
'The last thing we want is to build another overloaded power centre in Edinburgh. We want the Scottish parliament to draw down powers from Westminster and not to suck up powers from local government.
'The best safeguard for local government against an over-keen Scottish parliament must be that councils retains and indeed increase the support and confidence they enjoys from the electorate. But the existence of a new parliament in Scotland will inevitably mean that there will be a healthy element of competition between these two layers of democracy.
'It is essential that we have a fundamental and far reaching debate on the structure and management of local government if it is to flourish in the new environment of Scottish politics. The days are past in which it was automatically assumed that it was the job of councillors to be direct managers of services; or indeed that it was necessary for councils to deliver services directly.
'The key role for local government is to use its intimate knowledge of local needs to take an informed and strategic view of its whole population and geographical area. It is not the direct provision of services which is fundamental but rather the planning out of what services are needed, and then organising and co-ordinating their delivery. This means that a council and its members have to be able to take on a strategic planning role.
'I believe the time is ripe for a thorough look at what we expect of individual councillors, and therefore what kind of person we should want to see standing for election to a council. I have heard councillors speak of the overload they face and how it is increasingly impossible to be a councillor on a less than full-time basis.
'One way of tackling that problem would be to change the role of councillors; to release them from responsibility for day-to-day services and to liberate them to take a longer-term strategic and policy-making role.
'One further advantage of such achange would be to enable a wider range of people to become involved as councillors, if less of their time can be spent on responsibility for day to day management and more time focused on strategic and wider community planning.
'This is an important debate for local government to engage with. Indeed, it will be a `Great Debate' in capital letters. There is a case for flexibility and experimentation rather than a rigid prescription from the centre. We need to start the debate now.
'The independent Commission on Local Government and the Scottish Parliament will be announced shortly. We will want the commission to stimulate active, open and indeed controversial public debate; we want
it to provide the forum where such debate can take place; and we will put our own views forward from The Scottish Office as well as expecting others to do likewise.
'Devolution is a great challenge for local government. Our vision is of local authorities as the key partners in democracy of the new parliament. That is why we affirm in the White Paper the crucial role
of local government in the new constitutional settlement.'