The Short answer

If Gordon Brown wants to eliminate waste in the public sector, perhaps he might want to take a look at how some of the councils most loyal to New Labourism operate, such as Tower Hamlets Council who last month agreed to pay an out-of-court settlement to press officer Eileen Short ahead of a scheduled unfair dismissal employment tribunal.

The damages the council has had to pay aren't likely to burn huge holes in local taxpayers' pockets, but they might nonetheless want to question how their council got itself into this position. The answer lies in a familiar blind ideological faith in outside private consultants, the attendant unaccountable politicking this generates, and a comprehensive contempt for their own staff and trade unions.

Eileen, a press officer specialising in education, was the victim of a ridiculous bogus restructuring of the council's communications department in September 2005, in which she was forced to effectively reapply for her own job, since the reorganisation created various new 'press officer' posts. She duly applied to be assimilated into one of them. No one else did. She didn't get the job. And despite a subsequent dispute involving Unison and the NUJ - including three and a half days of strike action - she lost her job in January 2006.

So why was she forced out? Outside of her work, Eileen was active in the Defend Council Housing campaign, and was a strong opponent of the council's crude attempts to railroad tenants into voting to transfer control of their estates to less accountable housing associations. This was denied by the council, who themselves admitted that Eileen's outside campaigning had had no adverse impact on how she was performing at work, but, well, they would say that wouldn't they? And, as Private Eye reported, the fact that the council's then chief executive was Christine Gilbert, wife of former housing minister Tony McNulty, was also an interesting incidental detail.

But the nasty victimisation of a housing campaigner wasn't the whole story either. The saga epitomised the negative and destructive role that private consultants can play in public authorities, bringing not the efficiency and dynamism heralded by their Blairite cheerleaders - but instead unaccountable and politically-motivated chaos. Eileen was dismissed shortly after the council's communications department had been taken over by PR consultancy Verve, whose head honcho Lorraine Langham had managed to move smoothly from contract to contract throughout her many years with Tower Hamlets. A Verve consultant sat in on the interview panel that denied Eileen her job - so the company's protests that the dismissal had nothing to do with it were laughable. And throughout all this, the communications service provided to the media with the public's money inevitably suffered.

The failure of the strike to win Eileen her job back was demoralising for staff, but the payout and cave-in by Tower Hamlets has been some consolation. (She got a job back at the Town Hall last summer anyhow, when Respect's gains in the council elections made them the second party in the borough and thereby entitled to appoint a political adviser; they appointed Eileen.) Happily, the council's press officer posts are now back in-house and Verve and Langham are no longer on the scene. A battle lost, but a war (at least partially) won. And strikers' willingness to stand firm has certainly made the council think twice about picking such a fight again. This should be an example to others. And to union leaders.