HACKNEY Council, which has already had some of its education services privatised, faces unprecedented scrutiny of the way all its services are managed.
The London borough is expected to be the first to be inspected by the Government's financial watchdog, the Audit Commission, to judge whether its management is providing value for money.
Hackney is the only council where the district auditor has asked for the management to be inspected.
According to the auditor's report, fundamental weaknesses in management severely limit the counci's ability to comply with the new legislation designed to ensure "best value".
After a damning inspection report on Hackney's education service three years ago, ministers sent in the first "hit squad". Since then, private firm Nord Anglia has taken over the school improvement and ethnic minority monitoring services.
"Seeing is believing: how the Audit Commission will carry out best value inspections in England", is available from the Audit Commission, 1 Vincent Square, London SW1. Its website is at www.audit-commission.gov.uk