This article is the result of some extensive and lengthy interviews with officers in local and health authorities in two London boroughs. It focuses on their attitudes to resource planning and inter‐authority collaboration in the provision of services for two priority groups — the elderly and the mentally handicapped. The interviews were undertaken in 1980, in the aftermath of the tighter financial climate that followed the 1979 election, and fieldwork continued until 1981. Officers’ views were tested against models of inter‐authority activity drawn from varied literatures. Most officers turned out to have drawn extremely pessimistic conclusions from their experiences. The bureaucratic politics paradigm predominated. Very few participants had come to terms with what planning could mean in a period of declining resources. Most still thought of planning as what to do with the increment and saw little point in planning if there were no increments. However, there were interesting differences between the perceptions of NHS staff and local authority officers, and between those in different kinds of post.

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The public expenditure squeeze, coupled to stiff grant penalties, that has been such a feature of the last three years has had some surprising consequences for the balance of influence within local authorities between professional and political values. The move towards a corporate state that many authors have detected (Middlemas, 1979;Rhodes, 1981;Rhodes et al. 1982), a state in which a greater degree of professional influence on service provision would be expected, has apparently been reversed. At the same time, political expediency has come more to the fore, the public expenditure squeeze itself being but one sign of this process.Approaches to the study of central-local relations invoking the notion of corporatism have played a prominent role in the recent upsurge of research in the field, much of which was sponsored by the Social Science Research Council's nowdefunct Central-Local Relations panel. The research for this paper was supported by ~a grant from that panel. The study of central-local relations seeks to explain how power and influence in the system are distributed, what are the important lines of communication and so on. Rhodes (1981) argues that both parties have unique access to resources that the other needs and that therefore a process of &dquo;bargained exchange&dquo; is necessary. This process can be carried out with a variety of strategies, one of which is the incorporation of local government. Thus, &dquo;corporate&dquo;, in the central-local context, means that local government is included in the