Many local authorities are considering the alternative models of service delivery that exist as part of their on-going plans to deal with the financial austerity they face over coming years. Issues that should be close to the top of any list when weighing up the pros and cons of each option are governance and accountability.

One fundamental lesson learned by many local authorities over the last decade or two is that the more contractualised a service delivery mechanism is, the less governance control and local democratic accountability you will have over it. This does not necessarily absolve you of blame either should things go wrong. I only need to think back to last winter when local authorities were getting a roasting from the media and public alike for not responding quickly enough in gritting roads  ­– despite the fact in some instances responsibility for the roads had been outsourced for over a decade.

Of course many authorities have been shying away from wholesale outsourcing as a result of the immediacy of cuts and the length of time large-scale procurement exercises take to deliver. Some, however, have looked towards wholly owned arms length companies to give themselves the reassurance that if things go wrong they can still bring the service back in-house. Despite this, representatives of the council who sit on the boards of these organisations are legally bound to act in the interests of the organisation rather than the council. It is therefore of vital importance to get the heads of terms correct when setting up any such company.

With the Localism Act recently passing into law the ‘right to challenge’ may lead to further fragmentation of services through a variety of different approaches including social enterprise, mutuals and co-operatives. In the current financial climate is it really the right time to be handing public funds over to small groups of individuals without any recourse or on-going scrutiny? APSE's recent research surveyed more than 1,600 sources and found a lack of evidence as to the benefits of this model for local service delivery.

Looking to the future, it is likely that local government will have a whole variety of arrangements when it comes to service delivery. Will elected members have a significant level of influence and control in this brave new world or will they be reduced to the role of the favourite old uncle at family gatherings who regales everyone with tales of the good old days whilst no one really pays much attention to them.

Progressive austerity appears to be the message on public finances for the foreseeable future. In local government this translates to reducing costs or cutting services in order to pay for the sins of the bankers.

For those who have been in local government over the last few decades this is not exactly a new phenomenon. From the mid-1970s onwards every few years another government financial crisis appears, often originating from another source; from the International Monetary Fund intervention to CCT and from Black Wednesday to Gershon.

And as much as we can blame others for all of this, the reality is that the public sector has rapidly become the media whipping boy once again.

There is much talk of incremental improvement being exhausted with innovation and step change being the only solution. But is this really true? Or is it a convenient truth for those who stand to prosper from alternative forms of service delivery?

My view is that creating an environment in which efficiency and continuous improvement flourish will allow a culture of innovation to develop. It will also place local authorities in pole position to lead other public sector agencies in the total place agenda. So what might this environment look like?

Firstly, there needs to be a focus on good local performance management data. Not centrally driven targets, but meaningful useful information that identifies a baseline of performance which can be scrutinised for competitiveness and challenged by both elected members and local people.

Phase two is about process benchmarking with others to identify who has outstanding performance at present then examining how to get to that standard or level of efficiency.

This can be done in a variety of ways, but the management tools and techniques associated with systems thinking approaches could prove a useful start rather than simply attempting to replicate others.

Involving staff from all levels of the organisation from the outset in this process will help spread the message and build ownership of the solutions.

Having untangled staff from the organisational straitjacket of the past, you are now into level three where innovation can flourish. Transformational service redesign can take place by eradicating waste and bureaucracy and enabling such innovations as the co-production in service delivery we have seen in recycling and waste minimisation over the past few years.

This has encouraged residents to take more responsibility for their actions while having greater input into service design and allowed more to be done for less.Of course it may prove easier to achieve the benefits created by such an environment if you have retained control of your own destiny.

For councils locked into long-term contracts, it is likely to be someone else who reaps the rewards.