Plan to refund tax if councils fail

Residents are to be given the chance to obtain written guarantees from town halls that they will tackle specific issues such as drug dealing, dirty streets or graffiti.

Communities Secretary Hazel Blears will suggest the so-called "community contracts" could in future be backed up by forms of redress, including financial compensation.

The idea raises the prospect of council tax rebates in cases where services fall short, although any cash payments are likely to be limited to a small minority of serious failures.

Methods of redress under consideration for less significant breaches include public meetings of investigation or a right to a written response.

In a speech to the New Local Government Network, Ms Blears will say: "Those who really believe in delivering for the people they serve should also have the confidence to commit to some form of redress if those agreements are broken.

"People rightly expect a good standard of service and redress when things go wrong. When trains are delayed they know they are entitled to refunds or compensation.

"Improving transparency for other public services on a similar scale will not only improve standards but will also increase confidence in local democracy."

The "community contracts" will give residents the chance to set benchmarks for councils and bargain for particular services.

They will also be used to obtain commitments from members of the community to perform certain functions themselves, ranging from monitoring local incidents to managing services.