COUNCILLORS across the country were given a final warning last night by Scottish Secretary Donald Dewar to clean up their act or face dire consequences.
He gave them a blunt warning that the Scottish Parliament would clean up local government if they failed to do so.
Mr Dewar was enraged to hear late on Wednesday night about a #4m hole at the heart of North Lanarkshire's accounts. He moved swiftly to put a senior official from St Andrew's House in to report back immediately on the extent of the scandal, and threatened specific sanctions against the council's direct labour organisation.
Mr Dewar was acutely embarrassed that the latest in a series of scandals involving local government in West Central Scotland should break on the very eve of his delivering the biggest speech of the year on local democracy: the Dick Stewart Memorial Lecture at Strathclyde University.
The irony of the current North Lanarkshire council sullying the name of one of their most famous forebears was not lost on Mr Dewar and his staff. Last night, he warned councillors that the Scottish Parliament would ''fix things if they appear broken''.
He declared: ''If [Scottish Parliamentarians] perceive local government as inefficient, com- placent, an Achilles heel of misconduct, or an obstacle to the programme of the elected Scottish Executive, then local government may face very difficult times indeed. Your future is in your hands.''
Before his address last night, Mr Dewar said: ''I have received a preliminary report on this from my officials today and I have instructed them urgently to seek further detailed information from the council. In the light of that report, I will then decide what to do.
''This is an area where there is considerable public concern and where I have very specific and stringent powers to deal with direct labour organisations which fail to perform as they should. I will not hesitate to use these powers if I think they are the best way of ensuring efficiency and value for money.''
A senior official from St Andrew's House delivered a three-page report to the Scottish Secretary yesterday afternoon after speaking to North Lanarkshire Council officials.
After further investigations have been carried out, a ''notice of direction'' will be issued to the council, followed by a full ''direction'' which could vary from a slap on the wrist right up to closure of the direct labour organisation.
One strong possibility in the short-term is that existing DLO contracts could be put out to re-tender to prevent any continuing haemorrhage of council funds.
In last night's lecture, Mr Dewar declared that Scotland was in the middle of a democratic revolution and warned those involved in local government that the revolution could not pass them by.
He argued that the establishment of the Scottish Parliament would be like a shot of adrenaline to the whole body politic but it was not enough on its own to secure the democratic renewal of Scotland.
Democracy was not something which was handed down from on high. Rather it was something which flourished if its roots were nourished at local level.
Mr Dewar said the Scottish Parliament could be seen either as a threat or an opportunity to local government. His hope was that it would be a very real opportunity.
In an apparent endorsement of proportional representation in local government, Mr Dewar said there was a need to ask whether the current system could lead to complacency in councils where one party rule seemed unassailable and to ask whether local democracy was best served when 38% of people who voted for opposition parties in Glasgow were represented by nine out of 83 councillors.
He said things are not ''seen to be all right when we are constantly drip fed by the media with stories about councillors abusing their expenses, or preferring municipal infighting to serving the needs of their communities.''
However, Cosla vice-president, Kate Maclean, hit back, stating: ''Misconduct in Scottish local government is extremely rare. Despite the fact that we have more rules governing our conduct than any other part of the public service, there have only been two bases of surcharge since 1975.''
Meantime, union officials representing workers in North Lanarkshire Council's direct labour organisation are demanding an urgent meeting with administration leader Harry McGuigan to discuss their future. A report about the missing millions will be discussed today at the council's policy and resources committee.
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