As I commute around London I often find myself reminded of an age of greater civic pride by the sight of a former local town hall. Many of these grand buildings are now operating as restaurants or cafes – victims of successive changes in the administration of local government services.

2011 looks likely to see yet more dramatic changes in the way local government is run and organised. Central funding is to be reduced, in sharp contrast with the large-scale increases in spending on public services over the last decade or so. Yet those years of increased spending produced an average annual fall of 0.3 per cent in productivity.

So can an age of locally-driven innovation succeed where those years of centralised command and control failed? Will IT finally be able to demonstrate it can both reduce costs and help improve our public services?

It’s long frustrated me that for all the talk of shared services in the public sector they have been slow to materialise. But a recent joint statement from the London boroughs of Westminster, Hammersmith & Fulham and Kensington & Chelsea that they will share services is a significant landmark. In the past, lazy chief executives have typically taken a red pen to frontline services rather than fixing administrative waste and broken processes. This time we may see a different management approach, one that utilises IT to support long overdue reforms to public administration, reducing unnecessary back-office duplication and overheads.

Such changes will not come easy. They require a clear vision, strong leadership and highly capable change management teams. The use of IT to help reform public services through locally-driven innovation will be fiercely resisted by some, and throughout these changes local democracy, political accountability and transparency will need to be robustly maintained.

I anticipate a bumpy, noisy journey ahead, one in which public sector CIOs will be caught centre-stage. This is no minor cosmetic surgery, but an IT-enabled redefinition of how public services are designed and operated. Where central command and control failed, can ground-up, locally-based reform succeed?

If local government can rise to the challenge, such IT-enabled reforms may help to restore a little faded civic pride in our local town halls. Even if, in our digital age, those town halls become ever more virtual.

Jerry Fishenden is a director of the Centre for Technology Policy Research