I have lost count of the number of my constituents in North East Fife who have to turn to me because no one else will help them in their search for better housing, in their struggle to cope with the cruelly complicated tax and benefits system, in their desperate efforts to see a hospital consultant on time. Time and again, I am struck that, whilst individual cases might vary, the source of the problem is the same: public services run over the heads of the people they are supposed to serve, public bureaucracies dancing to the tune of targets set by central Government, local Government prevented from doing what is best for local people.

We live under one of the most intrusive and interfering Governments in living memory. Excessive centralisation did not start with Tony Blair – his Conservative predecessors relentlessly attacked the autonomy of local communities – but it has accelerated dramatically during his premiership. I listen with amusement to the way Government Ministers, and now David Cameron�s frontbench, extol the virtues of localism, of the need to weaken the grip of central Government. Who was responsible for the centralisation they now condemn but their own Governments?

How we respond to the problem of overcentralisation in Britain will have a dramatic effect on the way in which we organise our public services.

Public Services That Work For People, Not Government:

The recent debate about public services has focused on the extent to which private sector operators should provide some of the services previously provided by public authorities. Much of this debate has centred on claims about a purported improvement in the efficiency and quality of public services if delivered by private operators, versus concerns that private sector involvement in public services will exacerbate social inequalities.

Liberals and Liberal Democrats should have no philosophical problem with private sector � or voluntary and community sector – involvement in delivering better services provided this is not allowed to compromise the basic principles of universally accessible public services.

Liberals have always attacked the effects of private monopolies, so we must also be wary of the effects of centralised state monopolies too. We must not allow ourselves to think that only state provision can deliver liberal solutions. When the centralised state fails to deliver, it is those who cannot buy out or move out who suffer most.

Some of the best public services in the world, particularly in other parts of Europe, are delivered in a mixed economy of private, public, voluntary and community providers.

But I am sceptical of the exaggerated claims made about the virtues of the private sector, and believe it is notoriously difficult to apply market forces to core public services. I fear that taxpayers, for example, may have to pay a high price in the future for Gordon Brown’s addiction to Private Finance Initiatives. The emergence of inefficient and unresponsive private bus monopolies in cities outside London, or the crisis in dentistry � less than half the population is now registered with a NHS dentist � is a warning of what can go wrong if the right balance between private provision and public access is not struck.

A careful judgement needs to be made about the time and place to introduce private sector provision of public services. In some sectors it may make sense, in other areas, especially where natural monopolies exist, it may not.

Perhaps the most striking feature of the debate about private versus public is that it detracts attention from what is arguably the greatest flaw in our public services: the lack of accountability in the way in which local services are run. For parents, pupils, patients and passengers, the inability to identify who is responsible for the running of our local schools, hospitals and public transport is a source of enormous frustration. It means that public services are unresponsive to the people they are supposed to be serving. It is the biggest single reason why so many individuals and families feel alienated from our political system. People have no way of influencing the things that matter most in their everyday life. Our public services are organised by edicts from central Government and regional and local quangos, none of which are accountable to local people.

The challenge for Liberal Democrats is to make the case for a new model of public service organisation. This model will be based on democratically elected local representatives taking greater responsibility for local public services, together with new money raising powers in the hands of local communities. This is a crucial difference between the Liberal Democrats and the other parties. The issue is not whether the services are delivered by private, public, voluntary or community providers, but whether a diversity of providers can operate in a coherent framework, accountable to local people and authorities.

The other parties talk the language of localism, but they have no understanding that stronger local democracy is crucial. Yet this is a model which can be found in many parts of Europe, the US, and right across the democratic world. It generally delivers far better results. Local users of public services know which local politician to hold to account if the service is not up to scratch, and public service providers are subject to more immediate pressure from the users of those services to raise their standards. The extra responsibility also makes local government far more attractive to politicians who currently head for national government.

Such a localist approach is bound to lead to different solutions in different parts of the country. But that is welcome. Innovation and experimentation, as local communities decide for themselves how best to organise their own local services, will help reinvigorate Britain�s public sector.

I want to challenge our party to develop this model into a practical, political proposition. We must transform our belief in localism into workable reforms. It would represent a revolution in the way in which public services are organised and delivered in this country.