The man in the middle

For the record, Nick Raynsford is no Judas. He did not betray councils over rate capping; they just messed up. This is his justification of the bold decision to take control of 14 authorities' budgets last month. Victims included Telford & Wrekin, which ranked "excellent" in the inspection league tables, and Hereford, rated "good". A year earlier, he had pledged that such high performing councils would be rewarded with a number of freedoms, including exemption from capping.

It must have been hard to resist a u-turn. England was hit by some corker council tax increases last year - averaging 12.9% - that saw pensioners protesting for the first time, even threatening to go to jail over non-payment. Politically, it was getting all rather hot. So Raynsford broke his promise, did he not?

"I did not," he says decisively. He had to act, he implies, because of councils such as Tory-run Wandsworth, which abused the new freedoms. Instead of setting "a good example", it posted a massive 57% tax increase, having managed a 25% cut the previous year - an election year.

"Because of the behaviour of councils like Wandsworth, which showed a total disregard for normal prudence, we made it quite clear we could not retain an exemption for good and excellent authorities in subsequent years," Raynsford explains. "You can't have it both ways. You can't expect more freedoms and flexibilities, then act in a cavalier way - particularly as the public were very unhappy about last year's council tax increases."

He sits in his barely furnished constituency office in Greenwich, south London, and adopts his trademark posture: forearms spread across the table, craning forward at a 45 degree angle, as if ready to head an imaginary football. His speech is quick and succinct, free of the plastic veneer that coats many of his colleagues' conversation.

Was capping worth the price of emasculating councils at a time when public engagement is at an all-time low? Isn't it stealing the electorate's thunder? After all, what is the ballot box if not to vote out councillors who are playing hard and fast with our trust?

"Democracy applies to central government as well as local government," Raynsford says. "When people elect members of parliament, they expect them to do certain things. You will be very well aware of the pressures on us to take care of large council tax increases", he adds, with a clear nod to the rebel pensioners.

The damage to his relationship with local government as a result of the capping is palpable, generating cross-party disapproval. For all that, it would be a challenge to find someone in local government that dislikes Raynsford, who celebrates three years as local government minister on June 11. Local government insidersfrom across the political divide hold him - if not all his policies - in positive regard. The man has presence, and has given local government a strong voice in Westminster.

But then he understands local government, its foibles and limitations, as well as its strengths. He was a Fulham councillor in the 1970s, and spent two decades working in voluntary housing agencies, which forged his commitment to public-orientated service delivery. The housing charities used to continually come up against complaints about poor standards of housing management in local authorities.

He recalls a letter that he received during his first year at a Shelter housing centre, while dealing with someone who had been treated "very shabbily" by the local authority. "The letter: said 'I should remind you that this council has the best record for delivering more local housing'. It completely missed the point. They were solely preoccupied with the process of building and were failing badly on the human aspect of meeting the needs of people. It has been a passion of mine to ensure that we get public services that respond to people's needs."

He views the introduction of the comprehensive performance asessment, and the freedoms and flexibilities he introduced for councils under the Local Government Act 2003, as the best way of resolving the central-local tension between service delivery standards and local autonomy.

"There is a strong assumption in favour of territorial equity in the UK," he says. "We are a small country. People do not like wild post code lotteries but at the same time if we are make a reality of localism, which I care passionately about, we do need to ensure there is more scope for local authorities to take decisions in light of local circumstances, within the national framework that guarantees minimum standards everywhere. That is a challenge where central and local government has to work together."

Raynsford's brief is hectic. The balance of funding review is due to conclude in July, and much work lies ahead. It is widely tipped to recommend a significant shift in the share of money raised locally, to end the skewed local increases derived by such a high dependency on central government grants (almost 80%). The question is: how will it be raised? A council tax, a local income tax, new forms of local tax, a return to keeping locally raised business taxes, or a combination of the above?

Raynsford wants councils to watch closely the Gershon review of public sector efficiency, also expected soon, and take an active lead on its recommendations. It puts a clearer focus on councils to make savings through improved procurement and pooled back-office administration. He hints that if councils don't act quickly enough, he will. "It will reinforce the argument of those who want to take a top down approach if local authorities don't themselves take ownership of the agenda."

The money saved should help boost the councils' coffers during the "tight" financial settlement for 2005-06, says Raynsford. "This is not about making cuts. It is about making savings that can be recycled to improve services."

Raynsford is devising a 10 year blueprint for local government, opting for a radical overhaul rather than staying faithful to the changes that ordinarily alter the local government landscape over time. He fails to stub out rumours that this blueprint could include streamlining councils and introducing fewer, full-time, salaried councillors to percolate calibre to the council chamber.

He is, he says, "very excited" by this project, which has the blessing not only of local government, but the sector's greatest sceptic, the prime minister. "We felt it was important to think long-term and think radically to recognise that local government has a hugely important role to play in meeting the needs of local communities, building successful partnerships and delivering high quality services themselves and in partnership with others."

Raynsford is optimistic about a third term to deliver his vision, pointing out that the predicted losses in this year's election echo a parallel scenario seven years into the Tories' reign. They went on for another 11. "I am very confident that after the rocky period the party is going through we will come back."

The CV

Age 59.

Status Married, three children.

Lives Blackheath, south London.

Education Cambridge University (history); Chelsea School of Arts (diploma in design).

Career 1986-87, MP for Fulham; 1992-97, MP for Greenwich; 1997 to present, MP for Greenwich and Woolwich; 1994-97, shadow minister for housing and construction; 1997-1999, junior minister for London and construction; July 1999-Sept 1999, minister for housing, planning and London; Sept 1999-June 2001, minister for housing and planning; June 2001 to present, local government min ister; before parliament, director of a housing consultancy, and the London Housing Aid Centre.

Public life Author of A Guide to Housing Benefits, and member of the National Energy Foundation.