This briefing note, based on research carried out by the Tavistock Institute for the Fourth Option Special Interest Group (FOSIG) of the Local Government Association, explores the position of FOAs in this context. It:

• Reviews their current performance against a number of indicators;
• Comments in more detail on the implications for them of the current context;
• Suggests some next steps for these councils to pursue in the context of the current policy debate.

The need to secure further efficiency savings as a result of the current comprehensive spending review. The challenge of securing more devolved and engaged local government. The continuing emphasis on partnership working and a new relationship between Whitehall and localities. These are three key challenges and opportunities currently facing local councils. Councils in shire areas face a fourth issue: the consequences of the wide recognition that the status quo in terms of governance in so-called two tier areas is not an option. Some areas face reorganisation and some are pursuing pathfinder status to improve two-tier working. The rest are also being encouraged to improve the way they work.

These challenges raise particular issues for those councils with a population below 85,000 which took advantage of the fourth option in the Local Government Act 2000 and operate with a streamlined committee system. (In this report we will refer to these councils as Fourth Option Authorities – FOA) Some of these councils look set to be abolished as a result of reorganisation. Some may be encouraged to merge with their neighbours. Others will have to develop ways of collaborating more closely with other councils with different political structures. The pressure for more engagement and devolution will put the claim that FOAs are ‘closer to local communities’ at centre stage.