SOUTHAMPTON City Council is no longer in the top rank of local authorities.

The council has lost its top four-star rating after being judged among the best performing authorities for the first time in 2007.

An independent spending watchdog downgraded it to three stars, it was revealed today.

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Services for children and young people remained “below average”, with more school leavers not in work or training, a failure to make an impact on drug abuse, and backlogs of reviews and assessments in child protection cases.

Improvements were made in schools, but absences and exclusions were too high.

Libraries and leisure services also took a backwards step, inspectors said.

The authority was noted for revamping streets and tackling crime and antisocial behaviour. It was also making good progress with its green objectives and got top marks for environmental services, according to the annual comprehensive performance assessment by the Audit Commission.

Deputy council leader Royston Smith, pictured left, said that it was always going to be difficult for the council to maintain its top score under a tougher marking system.

He said: “What’s important is that we keep looking to improve and I’m pleased to say that we are already working towards getting better for this year and in the future.

“In 2009 and beyond I’m confident that residents will get even more value for money with the improved services we aim to provide.”

However, Liberal Democrat group leader Cllr Jill Baston said: “It’s disappointing that the council hasn’t managed to keep up its standards and the cuts that the Tories have imposed won’t help. It bodes ill for the future.”

Elsewhere, Hampshire County Council retained its four-star rating for the sixth consecutive year and hailed the declaration that it was “very good value for money”.

The authority has come under fire in recent months over the growing number of employees it is hiring and their pension costs, a sharp rise in the number of staff earning more than £50,000, and a refusal by councillors to curb their allowances.

Yet the council’s score for its overall use of resources, including how it manages and reports its finances as well as providing value for money, went up from three to the top four-star rating.

Hampshire County Council chief executive Andrew Smith said: “I am very aware of the hard work and commitment that all our staff invest to provide such quality services and I feel very proud to work with such a high-performing team.”

Isle of Wight Council maintained a two-star rating for the fourth year. It was the worst performing authority in the south-east.