We can navigate the storms ahead to a brighter future

The Scottish public sector is in trouble. After years of steady budgetary growth, the general economic collapse and, paradoxically, the massive taxpayer bail-out of the twin pillars of Scottish private sector pride, RBS and HBOS, are about to unleash a financial tsunami that will blow away existing structures and systems for delivering our public services.

Although the public sector, and local government in particular, have weathered many financial storms, the clouds blowing in are of a different, more menacing, nature and will cast a long, dark shadow over the public sector for the foreseeable future.

But do we have to play to the stereo-typical caricature of dour, doom-laden Scots? Or do we, as a nation undergoing a renewal, have the imagination and ability to seize this opportunity for positive change, reshaping Scotland's public services better to meet today's increasingly well articulated democratic demands, while ensuring sustainability for the longer term?

The present arrangements for Scottish local authorities were put in place against the grain of prevailing political wisdom. The changes were widely seen as a crass and, ultimately, unsuccessful attempt by the then Conservative government under Margaret Thatcher to prepare the ground for the privatisation of public services, and the eventual demise of local government.

The opting out of schools was designed to wrest the biggest spend out of town hall control and competitive tendering was to reduce councils to glorified contract managers, while the Scottish Office clung on to the vain hope that right-wing radicalism, Westminster Council-style, would be delivered by the Tory troops expected to storm the city walls in Stirling, take control in East Renfrewshire and deliver the biggest prize of all: Edinburgh.

We all know that the Scottish public took a different view: 32 new councils were elected in 1995 to start work on April 1 the following year. The April fool's joke was on St Andrew's House and not local government as none of the councils fell to the Thatcher torch-bearers. A new dawn for local democracy was about to begin.

But the resurrection has been a long and difficult process. Paralysed at birth, some of the councils struggled with a financial settlement that squeezed out the very innovation ministers had sought to encourage; with Aberdeen and Dundee city councils worst hit, having their rates base taken away. Both have struggled to survive ever since.

Some areas, most notably West Dunbartonshire, suffered from a lack of political leadership. Others were hampered by an officer core more interested in seeing out time than instituting real change. Others still, such as Clackmannanshire, were given an almost impossible task of delivering the full spectrum of public services from a tiny base.

The new "unitary councils" had been established as temporary administrative units, many with boundaries that cut across traditional community ties, reduced local power and extremely tight budgets.

From the wreckage, Scottish local government wrought some cast-iron improvements, with some councils, such as West Lothian, taking control of their destiny from day one.

Slashing senior staff numbers, removing inefficiencies and taking strides to make public services more effective, a group of dynamic local authorities set about change with vigour and determination.

Closing schools, sacking ineffective headteachers, raising rents to generate cash for investment in housing, merging community centres and village halls, putting the school and public library services together under one roof and other initiatives took place to secure control of the budget before the boom years arrived as the millennium approached.

Councils began to look across administrative and service boundaries, pioneering joint health and social care provision; integrating special education needs with health care; linking sports and school facilities; focusing on the service user and not the producer. Others sought to develop partnerships with voluntary sector organisations, some created social enterprises and there were even moves to reshape the relationship with the private sector. But this happened in a period of sustained budgetary growth.

What shape the future for Scottish public services in a time of contraction? Are there positive ways to manage a steep decline in resources while simultaneously making service improvements? Yes, by learning the lessons of the past but also by looking to provide services in completely different ways. Local government must be released from central diktat with the ending of the diktat of the civil service's administrative convenience, the one-size-fits-all approach.

Will our three island councils in Orkney, Shetland and the Western Isles be given the autonomy they strive for and the democratic control of the entire local public sector with the creation of single public authorities? Can Scotland's cities join the rest of the world by electing city mayors with the electoral mandate to sort out the capital's transport system? Will Glasgow's attempts at cross-council services based upon the internationally recognised city region concept deliver better services?

Do we have it in ourselves to set aside local rivalries in central Scotland and cross administrative boundaries to develop, say, a single, integrated education service for Stirling and Falkirk? How can Angus or Perth & Kinross best respond to a stronger, self-confident Dundee under a new leadership? Will recall votes, where the electorate can force a snap election on an unpopular or apparently corrupt member, give power back to the people and create a more disciplined approach to local politics?

And can we finally recognise that the London fire brigade, bigger than the whole of the Scottish fire service, exists with a single chief officer and does not need eight separate headquarters, eight fire boards and eight bureaucracies? It is telling that the case for the reform of the police service is being made by officers themselves, at all levels. Can we produce local police services while slimming down to two, three or four forces? As Barack Obama would say: "Yes, we can."

These reforms are possible without the time-wasting expense of redrawing lines on the local government map. And then there's starting a real bonfire under the quangos. There's the huge potential for social enterprise, especially in the environmental sector: community-owned wind farms and local food supply chains delivering sustainable local services.

A financial storm approaches. Tough choices lie ahead. But the Scottish genius for innovation and invention can weather that storm and deliver a brighter future for all.