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May you live in interesting times', goes the Chinese curse, and now the elections are out of the way, ‘interesting times' is precisely what local government faces. Managers and members need to be lined up at the start line ready for the starting pistol. The curse carries a double-edge meaning, and there is, indeed, good news and bad news for local government. The good is that local government could be at the heart of a Brown government agenda for social and economic change. The bad news, of course, is the looming backdrop of the CSR. Let's take a look at what might unfold in the next few months. Firstly, there is the aftermath of the local elections: the changes of control and the inevitable retirement of those chief executives waiting for an opportune moment. Then there is the ongoing saga of English reorganisation. If all 10 county proposals get the go-ahead in July, 55 districts face the chop by 2009, a huge upheaval. The new unitaries will effectively become guinea-pigs for all the management fads of the past couple of years, and offer a chance to write new structures and processes on blank sheets of paper. Conspiracy theorists believe the current proposals are the thin end of the wedge, but the Treasury and the Brown camp have little enthusiasm for wholesale reorganisation. They are, however, keen on sub-regions as part of the regional economic agenda, working closely with RDAs, so expect a few of these to unfold over the next year. Some will inevitably be city regions, such as Manchester or Merseyside, but one or two will be in rural areas, such as the east of England or the West Country. Watch out as well for the four two-tier pathfinders which were announced at the same time as the proposed unitaries in March. If these prove to be successful, they could well be rolled out. They also take on board in a more robust fashion the shared services agenda which, while being the flavour of the month, is proceeding too slowly for the Government's taste. Compulsion cannot be ruled out. This brings us to the CSR, which everyone has been warning will be tougher than predicted. We can already foresee the headlines next autumn. The LGA will say the settlement is woefully inadequate, ministers will say ‘we told you so' and urge councils to cut overheads and share services still further. Behind the figures looms the ever-rising bill for adult social care, which must mean a radical shift in the approach to funding with greater reliance on user fees. On the assumption that Gordon Brown becomes PM next month, speculation is rife over the shape of his cabinet and the future of the DCLG under Ruth Kelly. Another departmental makeover seems unlikely, not least to avoid the pulping of all that headed notepaper and embossed DCLG biros. The jury is out on Ruth Kelly herself. The Scottish PM will need English women Cabinet ministers, and her White Paper managed to steer a path between Blair and Brown. She could well be left to get on and implement it, though her deputy, Phil Woolas, could be promoted. Nor must we forget the Lyons report which contrary to initial media speculation still definitely has legs especially regarding business rate. Indeed the Financial Times only last week called for councils to be given business rate powers. And finally the Brown Government will be defined by its priority on the social and economic agenda in which local government has a primary role. Brown's number one target will be to reduce economic inequalities and social exclusion. He will set out to achieve this through the use of regional mechanisms such as RDAs and sub-regions as well as local authorities. His particular bugbear is to tackle the skills deficit which his ‘skills envoy' Sir Digby Jones warned last week could create a worsening underclass and in which local authorities have a vital role to play as employers, place-shapers and LEAs. For Gordon Brown if this challenge is not successfully met, then he will deem his administration a failure.

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WHITEHALL

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