As I prepare to retire as chief executive of Worcestershire CC and step down as chair of the Chief Executives' Task Force, I leave local government facing another major challenge in its history. But I remain optimistic about the future, not least because the sector is more confident about its ability to assert greater control over its future. I'm referring, of course, to the implications of the Comprehensive Spending Review 2007. So, why the optimism? Well, let's take a quick look at the recent track record of local government. Almost 80% of councils have achieved one of the top two performance ratings under the Comprehensive Performance Assessment, with three-quarters improving strongly or well. Local government has achieved its Gershon efficiency target a year early, having secured efficiencies of more than £3bn by the end of 2006/07. Local government leads our public services on efficiency, and has an excellent track record of pioneering fresh and innovative approaches to improving the lives of our citizens. Public satisfaction with many council services has increased steadily over the last decade. So, coupled with a growing confidence, it's in a robust position to take on new challenges. I'm also pleased to point out that a consensus has emerged on the need for a sector-led approach to improvement and efficiency, and the structures are being put into place to make that a reality. There's no doubt CSR07 is a particularly tough challenge. Just a 1% growth in funding and a 3% cashable efficiency target – equating to an eye-watering £4.9bn by 2011 – will force councils to make some difficult decisions. In turn, local authorities will have to respond by adopting new levels of ambition and innovation. More challenging projects must be taken forward, services redesigned, technology exploited and procurement made smarter. Every council must rethink its approach to efficiency and improvement. Traditional behaviours and practices which remain cannot go unchallenged. The stark fact is that if efficiencies aren't made, there will be reductions to frontline services. We mustn't lose sight of the fact that the improvement and efficiency agenda now is about providing better public services. It's about councils working with their local partners to transform the way services are delivered. For its part, the Department for Communities and Local Government (DCLG) has made it clear that councils can choose how and where to make their efficiency gains. Specific solutions will not be imposed, nor will targets be set for individual services or even individual councils unless negotiated specifically in their Local Area Agreements. I applaud the decision by the Government to fund an extra £150m for efficiency measures over the CSR07 period, bringing the total pot for improvement and efficiency to around £380m. The forthcoming national improvement and efficiency strategy, which DCLG is developing in association with the LGA and other government departments, will set the broad framework for guiding this investment. Local government must focus on getting the right structures in place to enable local authorities to respond successfully to the challenges laid down by CSR07. Regional Improvement and Efficiency Partnerships will be a cornerstone of this. By bringing together the skills and expertise of what were separate bodies, they will act as a focal point for councils. I know both the DCLG and the LGA are fully committed to making them work, and careful thought must be given to their structure. It will then be a matter for each region to determine its priorities. Similarly, the Chief Executives' Task Force must provide strong leadership to the sector, and its role will be strengthened to ensure all RIEPs are performing effectively. So, after 32 years in local government, I leave it in reasonably good health and, despite the pressures, feeling confident about its future. Rob Sykes is chair of the Chief Executives' Task Force and chief executive of Worcestershire CC