SCOTTISH local authority leaders believe a new independent report

could provide valuable ammunition in their forthcoming arguments with

the Government over its determination to reorganise Scottish local

government and possibly change some of its functions.

The report by Dr Ronald McQuaid, of Napier University, Edinburgh,

which was commissioned by the Convention of Scottish Local Authorities,

identifies the scale and importance of the economic development

activities of the larger councils.

It concludes that the contribution of local authorities is

''significant in every sense, and any erosion of local government's role

in economic development will leave Scotland very much the poorer''.

Well over #90m was spent by councils solely or primarily on economic

development in 1990-91. This does not include spending on roads, water

and sewerage, and further education colleges.

According to Dr McQuaid, regional councils and larger district

councils are active in most aspects of support for business people and

the disadvantaged, as well as in removing infrastructural and other

barriers to development. Small rural authorities are less involved.

Some council leaders fear that if the Government opts for a reform of

local government which involves the creation of many smaller single tier

councils they will be unable to perform some of their present functions.

A covering report from Cosla secretary-general Roy MacIver, which will

be discussed by the convention's economic affairs committee at a meeting

in Edinburgh later this week, says Dr McQuaid's work is the most

detailed and comprehensive survey on local authority economic

development activity to be carried out in Scotland.

Dr McQuaid's conclusions are based on a survey to which all regional

and islands councils and most district authorities responded.

Mr MacIver goes on: ''A characteristic of local economic development

is a high level of joint working with other agencies, and it is clearly

shown that any erosion of local government's role and participation in

economic development will leave Scotland very much the poorer.''

The committee, says the secretary general, will want the publication

of the report to have the maximum impact on the debate on the future

role of local authorities in supporting their local economies.