He has stepped down after nine years to become chairman of the Local Government Commission.
'In 1986 Lambeth and others were involved in rate-capping and relations with the commission were extremely fraught. The local authority associations still hadn't given the commission the benefit of a doubt,' he said.
'The decision to work more with the grain of local government and more in partnership has worked extremely well.'
'We have a lot of credibility at this moment because we are not beholden to local government or any political party. Local government has set a great deal of store by independent audit.'
He accepted Jim Butler's criticism, in his review of the commission, that there needed to be more emphasis on implementing value-for-money work locally (LGC, 18 August).
- The government is exploring the use of performance indicators to selectively remove capping, Sir David said.
The idea would be that ministers could remove centrally- imposed budget limits on councils which broke particular thresholds in their performance.
'If [service delivery] is being done well it will lead to being able to duck out of the cap system,' he said.