By politics.co.uk staff

Councils offering “bog-standard” services because of cost cutting will not be accepted, the communities secretary has warned.

John Denham said a taskforce would identify innovative efficiency ideas by council chief executives and promote them widely but that taxpayers would not accept “crude” efforts to save money.

Speaking at a conference hosted by the Local Government Network, Mr Denham said: “Local taxpayers should be vigilant if they are asked to accept reduced services because their council won’t take tough decisions to introduce shared services, sharing senior staff with other local authorities, PCTs [primary care trusts] or other bidders, or through making the best use of public buildings.

“It is clear that council taxpayers will not stand for anything less than the leanest possible operation – especially if that starts to impact on the quality of services or the cost of council tax.

“However, there is a clear warning here for councils. Running the most effective and efficient operation is not the same as conducting a crude cost-cutting exercise that sacrifices all notions of standards,” he added.

“It is simply not good enough to offer the most bog-standard, lowest-cost service, contracted out in bulk to the lowest bidder.”

A Local Government Association spokesman insisted the Treasury’s own findings showed local government was the most efficient part of the public sector.

At the same conference, the Conservative shadow chief secretary, Philip Hammond, floated ideas about matching benefit rates to the needs of local labour markets.

The move, championed by some local Conservative councils, had not previously been publicly accepted by the party leadership.

A move to setting benefit rates to match the needs of local labour markets has been pushed by radical Tory councils but it is the first time that the frontbench has embraced the concept.

“There are some key challenges we will have to face in delivering this agenda,” he said.

“Can we take the public with us in this agenda? Can we persuade people living in your area, for example, they would rather see the management of workless benefits in the hands of a local authority than in the hands of a national government setting standards nationally?”