2nd opinion: A plethora's a crowd

Apart from loot, housing's main interest in Gordon Brown's spending bash last month was the changing shape of inspection and regulation for social landlords. Somewhere ahead in the mists lies some new division of inspectorial labour between the Housing Corporation, the English regions and the Audit Commission.

Anoraks will jump in and say audit isn't the same as inspection and regulation is something else again, but those on the receiving end often feel they are the same.

Housing isn't alone in coping with change in external monitoring. The Audit Commission is having its value-for-money studies of the NHS taken away and given to the new, improved Commission for Healthcare Audit and Inspection, soon to rise from the ashes of the Commission for Health Improvement. Then there's the National Institute for Clinical Excellence, which also has an audit-like job within the NHS. How many commissions, you might ask, does it take to mend a broken-down defibrillator?

Contemporary historian Peter Hennessy has likened the Blair government's complicated set-up to Mervyn Peake's castle of Gormenghast. Public service agreements and delivery targets have swollen to elephantine proportions and auditors are falling over each other. By now even ministers have got the message and, at least privately, accept they have overdone things. So, what now? Think tanks, management consultants, and would-be gurus have already gone questing over the new paradigm and the next new thing.

One candidate emerged recently in the shape of public interest companies. This is a proposal that schools, hospitals and even local authorities be reconstituted as semi-autonomous bodies with greater fiscal freedom; they would be in the public sector but not of it.

There is nothing terribly new here. The idea is a cousin of "earned autonomy" and is not too far from what Tories like Nicholas Ridley and Kenneth Clarke once had in mind for local government and the NHS. The plan is far from watertight. Surely it only works if PICs have an income stream separate from Treasury grants or their own assets, to use as collateral in borrowing. In other words, PICs would be a bit like housing associations.

But what stops them, or registered social landlords for that matter, pursuing their own rather than the public interest once they have acquired that extra freedom? A hospital, anxious to maximise its revenues, might prefer to treat patients with private health insurance. A school might skew its intake towards more able students. If your response is, well, they should be regulated to stop them behaving in this way, we are back to square one, with our superfluity of regulators and inspectors.

Autonomy, whether for a PIC or an RSL, only works if managers are not tempted by the pursuit of special interest. If let go, they would have to be sufficiently imbued with a sense of the general interest. To state the obvious: most of these ideas for greater local freedom in the public service rest squarely on reviving trust and the joint possession, by the centre as by the local body, of a common culture of public service. How to grow such a public culture? The Blair government has not exactly been coherent or convincing in its thinking about the ideological bases of public service.

The House of Commons public administration committee recently produced an excellent report suggesting a new code to underpin a regenerated ethic of public service. But who would enforce such a set of rules? A new inspectorate, perhaps?