The Financial Times reports that: "Radical cost-cutting proposals by Conservative-controlled councils such as Barnet, Essex, and Hammersmith and Fulham are refuelling the Thatcherite debate about the role of the state and could provide a national blueprint for an incoming Conservative government."

Attentive readers of this site will be familiar with initiatives in those Councils and others. The FT suggests that the Shadow Chancellor George Osborne will be looking for inspiration from Councils that don't only seek efficiency savings but fundamental reforms in the way they deliver services.

In his speech George Osborne challenged the notion that being progressive politically meant increasing public spending:

"Some now say that the economic problems facing the country, and in particular the ballooning budget deficit, mean that the Conservative Party must put our interest in public service reform, localism and environmental improvement on the back burner.

They say that the progressive priorities that motivated the Conservative Party in the first couple of years of David Cameron's leadership are luxuries that cannot be afforded an age of austerity.

I couldn't disagree more strongly.

Indeed, I would argue that our commitment to fiscal responsibility in the face of mounting national debt is not at odds with progressive politics, but fundamentally aligned to it – as politicians on the left from Bill Clinton to former Canadian Prime Minister Jean Chretien once understood.

For there is nothing progressive about out-of-control spending that the poorest end up having to pay for, and nothing fair about huge national debts that future generations are left having to pay for."

 On efficiency savings, Osborne said:

"Let me hazard a political forecast.

This autumn, perhaps even this September, Gordon Brown will be finally forced to admit that spending will have to be cut.

It will be a moment of personal defeat when it happens, but happen it will for I am sure he realises how ridiculous his position has become.

Then he and his Chancellor will commission a series of hefty reports from lofty experts that will show how this will all be achieved by the magic of Whitehall efficiency gains.

We will have the Gershon Report Mark 3, which will prove about as effective as the Gershon Report Mark 1 and Mark 2.

Now don't misunderstand me, this government has become deeply and desperately inefficient.

We can and we will achieve billions of pounds of savings by applying some basic financial discipline to procurement and recruitment and cost control.

But to pretend that efficiency savings alone will suffice when the country is borrowing one pound for every four it is spending, is to take the public for fools.

It is deeply dishonest and it condemns those who claim it to the sidelines of the real debate.

The truth is that we need to fundamentally reform the way public services are delivered.This was true in the years of plenty, as politicians of the left like Tony Blair and Alan Milburn eventually came to recognise.

It is doubly true in an age of austerity.

For the alternative to fundamental reform of public services are deep cuts in the quality of those services.

Progressive reform or front line cuts – that is the choice the country faces."

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