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So near, yet so far, by Andrew Rawnsley

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23 September 2005

Tony Blair and Gordon Brown are meant to be as one on the need for radical public sector reform. But as Blair embarks on one of his last Party conferences as PM, his quest for a legacy is bringing him into conflict with his party – and his likely successor. Andrew Rawnsley reports

We all hope to be remembered. And no-one hopes for it more than prime ministers. Tony Blair once hoped to be remembered as the prime minister who cemented his country's place in Europe by taking Britain into the single currency. A combination of things conspired to prevent that.

Constitutional reform could have been a monument to his rule, but his lack of enthusiasm for it means that it is likely to be a half-completed edifice that someone else will have to top out.

An enduring peace in Northern Ireland has a reasonable chance of being a strong and lasting achievement of his time at Number 10, and the war in Iraq will certainly be indelibly stamped on the record.

That leaves Blair still looking to leave some permanent prints on the domestic landscape before he departs Number 10. He wants his remaining time in Downing Street to be a final fanfare, not a dying fall. He hopes to go out with a bang, not fade away with a sigh of might-have-beens.

And so his legacy quest has brought him back to reform of the public services. Since the election, the need for more sweeping and more urgent reform of health and education has been the constant refrain of Cabinet ministers and senior officials. It will be one of the most insistent messages in his speech to the Labour Party conference in Brighton next week. It is also likely to place him on a collision course with much of his party, with articulate and significant parts of the health and educational establishments, and with his chancellor.

Well, what's new about that? The answer is that Blair's intensified desire to push through change is likely to clash with an equally increased level of resistance to it. He made the rather extraordinary remark in a recent speech that his reforms to health and education were only 'roughly halfway through'. His determination to go out in a final blaze of reforming zeal will come up against opponents emboldened by the knowledge that he will not be prime minister by the time of the next election.

Blair is trying to make up for lost time. His years in Downing Street have been marked by frustration with the slowness of reform, and annoyance with himself for not beginning on it earlier in his premiership. In his first term, he had neither a clear enough idea of what he wanted to do with public services nor a plan for executing reform. In his second term, the ideas began to come together, but so did the opposition. The chancellor emasculated the freedoms proposed for foundation hospitals, and student tuition fees got through the House of Commons by only five votes and then in a heavily compromised form. Blair's final term is his last chance to make a reality of his frequent rhetoric of revolution.

When Alan Milburn said last week 'now is the time to go further and faster' he was articulating both the agitation of Blairites for much more reform and the nagging anxiety that the prime minister will again be stymied.

A potential revolution could be under way in health, whose consequences are incalculable even to its architects. In Blair's ideal NHS, patients will be able to shop around for treatment. It will effectively be a voucher scheme even if it won't be called that.

This has serious implications. If there is to be meaningful competition in the NHS for patients, really poorly performing hospitals will have to be threatened with closure as the ultimate goad for improving performance and the final sanction against those who fail to do so. Health Secretary Patricia Hewitt has hinted as much, as did John Reid before her. But hands up the Labour MP who wants to tell his constituents that their local hospital is going to be shut? Step forward the Labour MP who wants even to acknowledge any risk of that happening? No, there will not be many takers on the Labour benches for that idea.

Marketisation is one description for what will happen in the health service, although this is not the word Downing Street likes. It prefers to talk about 'contestability'. The theory is that pressure from above (Whitehall) and from below (the consumer) will combine to boost performance. Another buzz phrase is 'organic improvement'. The prime minister hopes that reforms driven by the users of services will become self-fuelling.

But choice does not seem to be very popular with the public at the moment. Pollsters report that most people don't choose choice. They are more likely to go along with the view of the Liberal Democrats, Ken Clarke and Gordon Brown in saying that they simply want decent, local services. Blair's belief is that once people start to enjoy being able to choose where they get their treatment, they will demand more of it. That will make it impossible for his successors to unravel his reforms.

There is a lot at stake in the internal arguments that are beginning to rage around the health and education white papers to be published later this year. The Treasury's view is that it is wasteful to lavish more cash on private provision of NHS health care. They also question its wisdom when the public finances are under pressure. Those who have heard the chancellor talking in private on the subject say his argument is that the government would do better to maximise the return from existing provision than bring in extra capacity from the private sector.

If Brown prevails in this argument, he will effectively destroy Blair's agenda for introducing more choice in the health service. There can be no meaningful choice in the health service without spare capacity in the system. Although the PM is expecting some tough struggles over health, he has told friends that he expects the really difficult battles to be over education.

In Labour's first term, education was regarded as something of a success story while health caused the most alarm. Now the public are more likely to believe that the health service has made progress while the performance of secondary schools has pushed them up the agenda – especially Blair's agenda. Shrugging off the criticism that city academy schools are still too unproven to be worthy recipients of many billions of pounds to finance expansion, he is determined to have 200 of them open or under way within five years.

Academies already in place have certainly been successful in attracting applicants. Some schools are over-subscribed by as much as ten to one. That is testimony to their popularity with parents. It is also testimony to the fact that they get twice as much in funding as the average comprehensive. And it is testimony to the despair of many parents, especially those living in inner cities, about the alternatives. Blair is still a long way from fulfilling his ambition to make state schools so good that only the very snobbish or the highly eccentric would see the point of opting to pay for a private education for their children. Would he now send his sons to school in Islington? Or would he still be sending them across the capital to be educated at The Oratory?

Choice is again his answer. Schools have gradually been given more freedoms from local authority control. I hear that he wants the education white paper to greatly extend those freedoms. If he has his way, all state schools will get a degree of independence close to that enjoyed by the academies.

'Tony is desperate to get more parental choice into the school system,' says one of his allies. To expand choice and to put pressure on existing schools, the PM wants private companies, not-for-profit bodies and parents themselves to set up their own state-funded but independent schools.

That has big implications for local education authorities. They have survived the desire of some of the Blairites to abolish LEAs altogether. But there will be many local councillors who will regard what is now proposed for schooling as a fate worse than death. In this new world, LEAs will stop being providers of schooling and instead become commissioners of it. This takes Blair into direct confrontation with a large and articulate section of his party. Local councillors will resist losing control over schools. These reforms won't be popular either with many teachers, a profession heavily represented among Labour activists.

Then there is Blair's enemy within. Brown has always been sceptical about academies, but he has previously kept his opposition fairly quiet and concentrated his forces on battling with the PM over health. But, in the expectation that he will take over at some point before the next election, his eye is now roaming across every activity of government. He is inevitably hostile to committing large sums to Blairite policies with which he does not agree.

At Cabinet level, Brown has a ready-made ally in Deputy Prime Minister John Prescott, who has always regarded himself as the guardian of the interests and powers of local councils. Some of Blair's allies predict that he will only manage to drive through his schools agenda if he is strong enough to take on and beat down a Brown-Prescott Axis. Number 10 likes to think that the ministers he is relying on to deliver reform are with his programme.

Blair has told friends that Health Secretary Patricia Hewitt and Education Secretary Ruth Kelly are as 'full steam ahead' for reform as he is. Even if he is right, his ministers have a tricky calculation to make about their own careers. They will be asking themselves whether their own political futures will be best served by pleasing Blair if that means crossing Brown.

This party conference ushers us into an unprecedented period with unpredictable consequences. Blair does not have another general election to fight. He thinks that liberates him to drive through reforms that will fulfil his legacy quest. He believes, to echo one of his previous conference slogans, that he is at his best when at his boldest. The rest of the Labour Party and the government have a rather different perspective. They do have further elections to fight. That means the PM must expect resistance from those in his party and government who believe that Blair at his boldest is when he is at his scariest. Fasten your seat belts.

Andrew Rawnsley is chief political commentator of the Observer

PFsep2005

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