The world of local government has changed dramatically in the last three decades as the dominant free-market philosophy ushered in towards the close of the last century has continued to make an impact.

As in the rest of the economy, the watchwords are efficiency and value for money. Public services are expected to show more clearly what they offer in exchange for their income. And, as in the case of the council tax, the provider is more clearly linked to the funders. So people can see more easily what they are getting for their hard-earned contributions.

But the change has not come easily. Millions of public sector workers have gone without real-terms pay rises for several years and many have been transferred to private sector employers. The 'public service ethos', it can be argued, has been weakened, in favour of a more market-orientated approach.

There has been, and continues to be, a clash of cultures between the old and the new.

The current legal battle over incremental pay at Nottingham City Council illustrates the contrast between the two world-views. On the one hand local government workers are used to receiving an annual pay rise to reflect their experience and length of service. On the other hand, local government employers are increasingly looking for ways to respond flexibly to labour market demands rather than hand out cash in exchange for loyalty.

The market-friendly approach has obvious potential benefits: it means councils can react quickly to changing conditions and manage their workforce more effectively. It encourages a more entrepreneurial culture, and is likely to provide council tax payers with more results-focused use of their money.

Some employees stand to gain. Skilled workers in short supply - IT specialists, for example - may find themselves in a stronger position to demand higher pay and better conditions. Ambitious managers can make a name for themselves by demonstrating their successes in a more individualised, less collective workplace.

Others, however, are likely to lose out. Unions, once responsible for negotiating pay rises for the local government workforce can now only agree what are, in effect, guidelines for councils, and many of their members have seen their living standards fall, particularly since 2010 when the Government's austerity policy imposed strict limits on their annual pay rises.

The traditional and the market-friendly approaches each have their strengths and weaknesses and workforce relations can be seen as being in a continual state of flux between the two.

The trick for really successful management is to find a balance that works well for all concerned - so the public gets value for money, individuals are encouraged to use their initiative, and councils are able to act quickly to changing circumstances - but at the same time the workforce as a whole does not suffer continual weakening of its collective bargaining power and erosion of its living standards.