The timing could hardly have been better. As the people of North Lanarkshire and East Ayrshire absorb the fact that the direct labour organisations of their councils have lost millions of pounds of taxpayers' money (maybe, like Dounreay's missing uranium, it never existed), the Association of Direct Labour Organisations turned up in Glasgow for its annual conference. To add to the pleasing symmetry there was a Government Minister lined up to speak and, although Mr Calum MacDonald is not normally the most forceful of politicians, he found it imposs-ible to miss the open goal manned by representatives of organisations which have been so widely discredited.

Is this fair and is there a reasonable case to be made for direct labour organisations? In Scotland they are estimated to employ 100,000 people and, on that basis alone, they require to be treated with normal consideration. Neither is there anything wrong with local council services, which are regarded more highly in Scotland than in the rest of the country, being supplied and controlled by elected local government members through officials. There is no reason on earth why such a system should not work adequately, even well, and there is equally no reason why the doctrinaire slash-and-burn approach which has seen many similar organisations in English local authorities disbanded or privatised should be adopted routinely in Scotland.

Yet there is an inescapable requirement to assess fully the operation of all of Scotland's 32 direct labour organisations with the express aim of discovering any more embarrassments (as the Labour Party might regard them) or downright disgraces as the rest of us would say. The interesting question is when or at what level local mismanagement becomes bad enough to be registered as a problem, for there will be many who will agree with Mr Andrew Welsh MP that similar problems to those discovered recently are endemic within local government.

Among Mr MacDonald's stern words and promises yesterday was a clear recognition that badly-performing organisations could be made to find a private sector partner. This could be a sensible way out of short-term problems, although it would be wrong to believe that private endeavour in this field is by definition better than public works. The Government seems determined to take powers which will allow it to intervene directly in the operation of failing councils but, again, the interface between the Scottish Parliament and local government will be among the most delicate and difficult areas for both bodies. The new Parliament should be able to take errant councils by the neck and give them a good shake, but there will be few benefits for anybody, and least of all the public, if the Scottish Parliament ends up as a surrogate local authority. The Government's actions thus far have been correct.

The next step is to be ruthless with incompetence and mismanagement but to recognise decency and value where it is found.