LIVERPOOL will be named today as the second most improved council in the country.
The city's annual "school report" from the Audit Commission reveals a major turnaround in fortunes over the last four years.
The council is now ranked as good - the second highest band - and an improvement from just fair last year. In the past 12 months, only Bury has improved its services more than Liverpool.
Around Merseyside, St Helens received the best scores of any council, but all authorities remained on the same ranking.
Knowsley and St Helens were both rated "good" and Sefton and Wirral "fair"
In Cheshire the County Council remained excellent while Halton and Warrington stayed good.
The Comprehensive Performance Assessments (CPAs) - which rank councils as excellent, good, fair, weak or poor - singled out Liverpool's education service for particular praise, ranking it excellent.
Chief executive David Henshaw said the assessment was "vindication" of the approach taken by the authority over the last few years.
He said: "Four years ago we were a basket case council. To be ranked as a good authority now when we were one of the worst in the country just four years ago is unheard of in local government.
"This is a vindication of the approach we took which was a radical one driven by a combination of political and managerial leadership.
"There has been a huge reduction in the number of employees and we have taken £120m out of the cost base. We have improved services yet people are paying less council tax than they were five years ago."
The turnaround in education has been particularly dramatic.
In 1999 that service was failing and was on the verge of privatisation, as council leader Mike Storey recalled last night.
He said: "One of the first things that happened when we took over was a failed Ofsted schools inspection.
"We ourselves commissioned an even more damning report.
"We weren't spending enough on education, we had children being taught in appalling buildings, morale was low. It was really clear that if we were to deliver on our promises to improve services then we had to take some radical steps."
Those steps have included one of the country's biggest school rebuilding programmes, paid for by the Private Finance Initiative.
From having 16 schools in special measures in 1999, Liverpool now has none.
The gap between the number of pupils getting five or more GCSEs at grade C or above in Liverpool, compared to the national average, has halved from 15pc to 7.5pc in three years.
The radical steps also saw the city council advertise for a new chief executive, which saw Mr Henshaw arrive from neighbouring Knowsley.
Coun Storey said: "We offered the highest chief executive salary in the country at the time and got a lot of stick for it.
"Today is the day when that ruthless determination to succeed has been realised.
"If we had paid the chief executive double what we did, it would have been worth it."
Mr Henshaw earned around £170,000-£179,000 last year but refuses to discuss his salary. He said there were much higher awards to be earned in the private sector.
He said: "In a way the CPA is a proxy of the stock market. Four years ago, the shares in Liverpool would have been penny shares.
"Now our stock is accelerating, it is going through the ceiling. And the shareholders - the people of Liverpool - are getting better services for their money."
Liverpool's success could once again make Mr Henshaw a target for other job offers, possibly from Whitehall, but he declined to discuss his own future.
"I am a Liverpool boy, I was given a good education by this city, went away for many years and then came back," he said.
"What drives me is seeing the kids we had let down now getting a better education in a city that has jobs for them, instead of the hopelessness they felt before.
"In real terms there are 800 kids a year getting a better education in Liverpool."
Results on environment and benefits also improved but the CPA highlighted housing and social services as areas that remained "weak".
Surprisingly the libraries service, awarded beacon status, dropped a rank to "weak" though this has been appealed against and may be upgraded.
Mr Henshaw put the housing problems down to decades of under-investment which had left a repairs backlog of more than £600m. He said: "There is no room for complacency. There is still a lot of scope for improvement. We want Liverpool to become an excellent authority, and we are well on our way to achieving that."
SEFTON is "moving in the right direction" despite maintaining a "fair" rating in this year's assessment, according to Councillor Tony Robertson, cabinet member for performance.
Coun Robertson, also leader of Sefton Liberal Democrat group, last night said he was pleased with progress in most departments over the last year - in delivery of benefits.
He said: "This result is no great surprise. Sefton is in the middle of an ongoing improvement programme and we can't be expected to transform services over night. "We are beginning to see that some improvement is being made, certainly in regard to benefits which have moved from a fair to a good rating this year.
"All the other categories have pretty much stayed the same, but within the council we are seeing marginal improvements - they are just not big enough to have a visible impact on the ratings yet."
Coun Robertson added that he was pleased the borough had maintained its longstanding reputation for education, which once again received a "good" rating, along with environment and social services.
The big challenge now is to bring the borough's housing, library, leisure, and children's services, which all received a "fair" rating - up to scratch.
Coun Robertson said: "I am satisfied that we are moving in the right direction. The way forward now is to become a good rated authority."
HALTON was once again named as a "good" council by the Audit Commission, the same as last year.
Chief executive Mike Cuff said: "The council is very pleased with its CPA and proud to have achieved a 'good' status. "Following last year's rating, we are pleased to have reaffirmed this standard and received encouraging comments."
Halton's use of resources and environment service were rated excellent but social services, housing, and leisure and libraries were all regarded as weak.
WIRRAL Council received just a "fair" rating, the same as last year.
Social services for children were regarded as "weak" as was the leisure and libraries service.
Use of resources and the benefits service were rated "excellent" and there were improvements in housing and social services for adults.
The Audit Commission said the council was well placed to improve the way it works and the services it provides to people.
It also highlighted significant investment in key areas such as e-government and services for young people.
Chief executive Steve Maddox said: "Last year we used the findings of the council's CPA to drive forward improvements in priority areas and our scorecard for 2003 reflects the focus we have placed on improving those areas. "The scorecard shows we have concentrated on the right things, and are moving forward overall in our performance."
WARRINGTON was rated as a "good" council, the same as last year.
The Audit Commission found it was continuing to deliver "high quality services."
The inspection team found that "most services have improved" and the council has "sought to address the weaknesses identified in the 2002 inspection."
Top was Warrington's education programme which was rated "excellent". Only the leisure and libraries service was rated less than "good".
Leader of the council Mike Hughes was also singled out for praise. The inspectors pointed to his "clear and concrete vision for the town and its surrounding area."
They concluded that the council is "well placed to further improve the way it works and the services it provides."
Interim chief executive David Whitehead said: "We have learnt a great deal from these robust but fair independent evaluations and we are already actively working to build on these improvements and ensure we continue our strive for excellence."
Coun Hughes added: "This independent report clearly shows that the people of Warrington are being serviced by a good council with high quality services."
ST HELENS received the highest scores of any council on Merseyside.
Although rated 'good', as last year, it could shortly join the ranks of the elite 'excellent' councils.
It will be specially reassessed on February 2 to see if it can be boosted to 'excellent' status by the Audit Commission.
St Helens was rated excellent for environment and benefit services, and its use of resources. But housing, social services for children and leisure and libraries were regarded as weak.
CHESHIRE council council was named as one of the country's best, with an "excellent" rating.
Only 26 out of 150 authorities audited were awarded the top rating and Cheshire was receiving it for the second year in a row.
In its report, the Commission states: "The council has maintained its services at the high level we saw last year. "It has also made progress in further areas, mainly in education, which continues to perform very well indeed."
But Cheshire could still face reorganisation if plans for a North West Regional Assembly are approved.
Council leader Paul Findlow said: "The Cheshire public will justifiably ask: 'Why do we need a highly costly and disruptive reorganisation when we are already served by one of the country's top local authorities?' "
Labour group leader Derek Bateman said : "Cheshire has maintained its proud record of service to the people of this county."
And Liberal Democrat group leader Sue Proctor added: "I am delighted that the Commission has stated quite clearly that the county council has been measured as excellent in the way it serves its local people."