THREE councils - Hampshire, Essex and Birmingham - have been drafted in by ministers to take over failing local authorities.
They are among the 10 organisations invited by the Government to bid for contracts to take over council services. Others include a company with links to the grant-maintained movement and the only national charity dedicated to tackling social exclusion among young people. The Education Partnership, one of the early contestants in the race to take over the failing Kings' Manor comprehensive in Surrey, is also listed.
But the Local Government Association, which represents 170 councils nationwide, did not even make it on to the shortlist. Graham Lane, education chair of the LGA, said: "The fact that the application from the LGA was not approved by the Government is not only stupid it is not credible.
"A lot of the people wanting to take over councils are there to make money, not to raise standards."
The list of 10 includes private, public, profit and not-for-profit bodies who will be expected to show value for money when bidding to take over services. But they will be able to charge a "management fee".
Seven council services are open to bidders: raising education standards; financial management and school funding; organisation of school places; supporting governors; employment and staffing; services to pupils and parents (such as assessing special needs); and leadership and management.
Adrian Pritchard, chief executive of the Centre for Education Management - which has links with the GM sector - said he was thrilled his consortium had been selected from the 107 applicants.
"I hope this is the start of some really innovative public-private partnerships in education," he said.
The charity Include, which is the largest provider of services for excluded young people, will provide an integrated behavioural support service.
Education Secretary David Blunkett announced his intention to advertise for contractors to take over key council functions at the North of England education conference in January .
The six organisations awarded framework contracts for possible consultancy are KPMG, Lorien, Capita, Office of Public Management, PriceWaterhouseCoopers and Arthur AndersenBirmingham LEA.
The 10 organisations invited to bid for contracts to take over local authority services are Arthur AndersenBirmingham LEAAPS Keele, Cambridge Education Associates, Nord Anglia, Hampshire LEA, The Education Partnership, Capita, CfBT, Essex LEAWindsor and Co, Include and CEM Consortium.