The Westminster Scandal: Council became flagship for Thatcherism: Where wealth and poverty formed a volatile and high-profile arena for some radical and sometimes disastrous policies; The Borough

IF BY early 1990 anyone had any doubt about the esteem in which Margaret Thatcher held Westminster council, she drove the message home with one of her classic exhortations from the dispatch box that other local authorities should follow its 'excellent lead' in setting a poll tax bill of pounds 195.

With Parliament, Buckingham Palace and the heart of London on its turf, it had always enjoyed a special significance in the British political psyche. For that reason alone the Tories have historically wished to hold the reins of power.

But with the arrival of Lady Shirley Porter as leader in 1983, nine years after she became the member for the Hyde Park ward, the council was transformed into a Tory flagship with pioneering policies that often went further than the Government demanded.

Maintaining control became all the more important, at least partly because of the embarrassment a high-profile loss would cause. But it became all the more difficult as the political landscape shifted with signficant demographic changes across the borough.

More than most city centres, huge swaths of Westminster, which stretches from Kilburn in the north to the river Thames, is characterised by wealthy areas like Belgravia, Maida Vale and the West End that could be expected to keep the Tories in power.

But within those areas, many of the houses are second homes, or belong to diplomats or foreigners who are unable to vote, diminishing the the Tories' natural constituency.

Tracts across the north of the borough are, however, extremely poor - with large, solid-Labour, council estates that sometimes threaten to rob the Tories of their traditional power base.

Into this volatile mixture stepped Lady Porter, at a time when Margaret Thatcher was consolidating her hold nationally and pressing ahead with her radical policies.

A range of right-of-centre policies designed to radicalise local government were introduced in tandem in Westminster - council house sales, privatisation of services, and the concept of 'one-stop' service where all queries could be dealt with.

'She was to local government what Mrs Thatcher was to national government,' a source said. 'She displayed a mixture of right-of-centre radicalism with metropolitan populism.'

While it is claimed this no-nonsense style of leadership produced benefits for Westminster when compared to many other London boroughs, the flip-side was that the conventional rules often appeared staid and boring.

The sale of the council's cemeteries in 1987 for 15p to a Swiss-based Panamanian-registered company was a debacle. The council was forced to buy them back at a loss to ratepayers of pounds 4.25m.

As Westminster's public profile grew, so the Tories' fortunes appeared to become more precarious - with the party's fears heightened by the spectre of Labour's more exotic 'loony-left' local authority figures like 'Red' Ted Knight in neighbouring Lambeth and Derek Hatton in Liverpool.

In the end, however, Westminster's low poll tax tipped the balance and was seen by many as the factor that strengthened the Tories position in the borough in the 1990 local elections - against the run of results in the rest of the country.

In the 1990-91 financial year, the tax was set at a level of pounds 195, considerably lower than the average around the country, and much less than neighbouring inner-city areas.

The following year, the council trumpeted its success with a poll tax of just pounds 36, though critics maintained it had been achieved with the help of government grants substantially greater than other boroughs had managed to negotiate because of the relationship between local and national government.

While, the authority sought to highlight the financial benefits of continuing to vote Conservative, a number of high-profile campaigns claimed it was improving the quality of life.

Education standards were being raised, it said, with the award of new contracts for running school inspections, characteristically the first of their kind in Britain.

In Soho, traditionally a seedy district of live sex and peep shows, a highly visible crackdown was launched with a flourish - a warning to those involved in the trade, and a message to the voters that the council was cleaning up the area.

Similarly fly-posting was tackled with gusto and a 'swat team' was dispatched on to the streets to rip down the 'unsightly posters' at every corner.

Specialist street-sweeping machines were not allowed quietly to trundle into action. Only a fanfare of publicity would do.

But it was in the privatisation race that Westminster made the running. By last year, 39 services had been put out to tender, saving an estimated pounds 10m.

The biggest money-saver was refuse collection and street cleansing, pounds 1.77m annually, though even the traffic warden service, now in distinctive new uniforms to drive home the point, notched up a pounds 1.23m cut.

----------------------------------------------------------------- Table: London borough's vital statistics ----------------------------------------------------------------- Resident population: 182,500 Daytime pop: 1 million Number of homes: 100,860 Owner-occupied 35 per cent Local authority 20 per cent Privately rented 33 per cent Housing Assoc 12 per cent Vacant 12 per cent Second homes 5 per cent Theatres/cinemas 74 Restaurants/snack bars 1,548 Hotels 492 ----------------------------------------------------------------- Top tourist venues: ----------------------------------------------------------------- National gallery 4.3m visitors Westminster Abbey 2.2m Madame Tussaud's 2.2m Tate gallery 1.8m London zoo 1.1m -----------------------------------------------------------------