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.

Much like Colin Firth’s character in the film the King’s Speech, it has taken David Cameron some time to find his voice on his true intentions for the future of public services.

In his recent Daily Telegraph article, he stopped hiding behind Big Society and Localism rhetoric and spoke clearly about something a number of us had long suspected – that he wants a much greater role for the private sector in the delivery of public services.

The Prime Minister’s White Paper outlining his thinking on this is imminent. Local authorities of all political colours may wonder how helpful his plans will be however, at a time when they are struggling so desperately to cope with unprecedented budget cuts that threaten services upon which local communities rely.

It appears that Mr Cameron believes the only way to improve services and make them more efficient is by making markets and competition the default position for delivery, with current provision mechanisms confined to history.

Those who have been responsible for running council service for many years may be surprised by the tone of his comments as it appeared to infer that public services are a closed shop on delivery at present. The review of the ‘public services industry’ by economist DeAnne Julius in 2008 found it was worth £79bn to the private sector and growing. Anyone involved in local government knows that the Prime Minister’s portrayal of some sort of monolith dinosaur is inaccurate when all the evidence shows councils have modernised, services have improved and pluralism of provision has prevailed.

Implementing any new approach takes up vast amounts of time, energy and, indeed, resources; none of which are in great supply in local government at present. Do we really have the capacity for this type of experiment amid the current carnage that local authorities are facing?

For those with long memories, his observations may smack of a return to the failed policy of Compulsory Competitive Tendering, which was imposed upon local government in the eighties and nineties. Indeed I made this prediction myself in the first MJ of the new year, when announcements were made regarding the intention to remove the two tier workforce code.

Commentators who have championed greater involvement of third sector organisations in public services may cling to the hope that this is about divestment of services. But the fact that this has never really been about them is now loud and clear.

This first six months of 2011 is likely to be the toughest period for local government in a generation, with the impact of the cuts becoming all too real. Redundancies, wage freezes and higher than anticipated inflation mean morale will plummet as the local government workforce knows it is being targeted unfairly to pay for the sins of others. A growing tide of resentment will lead to support for protests and perhaps industrial action.

Significant changes in political control are likely to occur at the May local elections when the Coalition’s popularity is tested. Towards the end of the year, local government may gradually become more sanguine despite a noticeable deterioration in service levels by an unhappy public. Post-cull, those that remain will be busy trying to do their best under less than easy circumstances. As the Localism Bill clears the Commons, many of its strongest advocates will be left disappointed as the rhetoric of third sector involvement manifests itself as marketisation of local services.

The Conservative Party conference has been in Manchester the past few days and I managed to attend a few fringe meetings on APSEs behalf.

Shadow Treasury Minister Greg Hands and leader of Hammersmith and Fulham Stephen Greenhalgh spoke at the first event on regeneration. Stephen linked successful regeneration to the return of business rates to local government and improving local housing and infrastructure.

At a separate event on localism and economic resilience Leader of Westminster City Council, Colin Barrow spoke along with Mike Whitby, Leader of Birmingham City Council. Mike makes a very impressive case for Birmingham as a global city and understands the need to ensure community benefits from both public and inward investment. He suggested that the ingredients for local economic success were around keeping council tax rises small, streets clean, a decent housing stock in place, communities safe and educational attainment high.

George Osborne's pay freeze on public servants on salaries above £18,000 in 2011 was a bold move. With inflation likely to be on the rise again by this point it could prove a significant cut in real terms for those who are just above this benchmark.

One of the first tests of David Cameron’s localist credentials, should he be elected as the country’s next Prime Minister, could be to see whether he completes the legislative process Housing Minister John Healey has started by announcing the dismantling of the national housing revenue account system.

With a consultation paper due any day on the matter, the detail of the proposals that many have called for should become clear. However the Minister clearly stated his intention to equalize the existing £17b of overhanging debt across England’s 202 housing authorities in order to allow them to be self financing from that point onwards.

Due to the ongoing failure of the private sector housing market the Government’s aims of building 3m new homes by 2020 look further adrift than ever. Even when economic recovery commences affordability will remain a massive dilemma, unless we see a dramatic increase in supply. Council house waiting lists are sitting at 1.8m, a figure which almost matches the units lost by right to buy and demolition, which have never been replaced by wider social housing providers. With many more living in overcrowded conditions, local authorities are chomping at the bit to aid their communities; the only thing stopping them is the constraints placed upon them by the outdated housing finance system that currently exists.

Government has woken up to the huge public need for affordable housing with the initial £100m new build council housing announcement in the budget, quickly followed by an expansion of this pot to £400m in John Healey’s statement. However it is predicted that this funding will only support some 3,900 units in total. Whilst it is a drop in the ocean, it is at least a start and will see local authorities commence new build council housing for the first time in a generation.

In the late fifties and early sixties 245,000 council houses were being built on average in England per annum, last year it was no more than a few hundred. The LGA estimates that if the primary legislation required to dismantle the national housing revenue account is started by the current government and the process is completed by the next government, whoever that may be, then local housing authorities would be in a position to build an additional 139,000 council houses over the next decade.

Having shared a dinner table with Conservative Shadow Minister Bob Neill recently, I got the impression that this was an agenda the Conservatives were warming towards.