Mr Blair is right to demand results in return for public money

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The Independent Culture
NOT SO long ago, a senior minister in the Blair government was delighted to come across, in Lord Blake's estimable history of the Conservative Party, the passage in which the Duke of Wellington described the first cabinet meeting he had chaired as prime minister. It was, the Duke complained, an "extraordinary affair. I gave them their orders, and they wanted to stay and discuss them." It says something for his self-confidence that the minister was proposing to send the quotation off to the present Prime Minister because he was quite sure he would enjoy it.

The context in which the minister mentioned the Wellington remark was not, as it happens, Mr Blair's own fabled reluctance to prolong the weekly meetings of the full Cabinet. Rather, it was part of an attempt to explain some of the frustrations which lay behind Blair's now-famous remark earlier this month about "the scars on my back" borne in the task of persuading the public sector to accept change, reform, modernisation. Prime ministers have great informal powers, the most tangible of which is the one that Mr Blair will exercise next week of hiring and firing ministers. But they are not like secretaries of state; they have no armies of civil servants working automatically to their diktats; they do not have their names on bills; they do not have levers to pull which produce immediate results.

And Mr Blair is a results obsessive. Mr Blair's frustrated outburst about the public sector was one testament to that obsession. And in its own way, next Monday's annual end-of-term report on the Government's performance is another. Being a New Labour document, it will, of course, use an arresting new presentational device. This year, various public servants up and down the country, from teachers to coastguards, have been sent disposable cameras to photograph scenes of public service delivery - many good and, in the interests of credibility, some bad. Interspersed with the images of refurbished classrooms stocked with new books, there will be the odd dilapidated urban area for which the local authority has failed in a competition for government grant. This is of course, in the purest sense of the term, propaganda. It will seek to show how hard the Government is working to improve the main public services. But I'm assured that its tone is not so much relentlessly boastful as factual and sober, alive to how much still needs to be done.

It is easy to deride this exercise (though last year's annual reports, believe it or not, sold a briskish 20,000 copies at pounds 5.95 apiece) But however earnest, it is an honest, if very limited, attempt, to make the Government accountable for how it is spending the taxpayers' money. Which brings us to the interesting connection between what, as taxpayers, the public are prepared to pay for public services and what, as consumers, they see they are getting for it.

The "accountability" theme is a highly fashionable one. It is being pondered deeply, for example, by the Commission on Taxation and Citizenship set up by the Fabian Society under Lord Plant to examine how taxation can be, as it were, rehabilitated after the low repute into which it was plunged, first by Labour governments which imposed too much of it, and then by a Thatcher government which devoted itself, at least as far as income tax was concerned, to cutting it.

Plant takes as his starting point that the tax system has a basic deficit, underlined by the fact that from North Sea oil through privatisation receipts to the windfall tax, successive governments have needed to make one-off injections of money to keep expenditure up to acceptable levels. This is made more acute by the looming erosion of parts of the tax base in a modern, global economy. It isn't simply that many more rich Brits than Michael Ashcroft find it convenient not to pay every penny they could in UK taxes. It's also that developments such as e-commerce make national corporate taxation well nigh impossible to collect. Plant's committee, which will report next May, will therefore no doubt look at all sorts of alternative sources of revenue, from land and energy taxes to the interesting switch in Singapore to transport taxes on car owners which has seen income tax reduced and congestion solved at the same time. But it will also look at ways of making existing forms of taxation more acceptable, from local referendums on council tax increases for a particular purpose, to the venerable but never (at least in Britain) realised idea of hypothecation - the system, traditionally despised by the Treasury, of earmarking a tax for a particular item of expenditure.

But, as the Plant committee is beginning to find, quick fixes such as hypothecation do not themselves solve the problem. For example, the fact that Taxpayer A uses the NHS and wants to see it improved does not necessarily mean he feels any better about a hypothecated health tax. If he doubts - as well he might, given the history of the last 20 years - that his taxes will be well spent, if he can't see positive results when he uses the NHS himself, then he is hardly going to look at a health-specific tax any more benignly than he would at general taxation. The real, if somewhat hyped, increases in public spending on education and health haven't themselves persuaded users of the NHS that its services are getting better.

All this has started to matter at mid-term. Because although the current Comprehensive Spending Review runs for another two years, spending ministers are already limbering up for the fresh settlement which they would like before the next general election. And here the response from the Chancellor is bound to be interesting. There may be issues on which Mr Brown and Tony Blair disagree; but one on which they don't is the paramount importance of that word "delivery". That's why Mr Brown and his officials are rigorously enforcing the Public Service Agreements which demand results in return for payment. That's why the Chief Secretary Alan Milburn has been imposing a regime where named officials are personally answerable for meeting performance targets. And that's why Mr Blair gets so frustrated from time to time that change isn't happening faster.

For all his achievements in ditching the commitments Labour had in 1992, Gordon Brown has never demonised tax and spending. I suspect that he is as keen as anyone to make it respectable again. But his argument will be that the voters will only be willing to reverse their objections to increases in taxation if they trust the politicians to spend it effectively. And if the next set of totals fall below what spending ministers would like, they should consider this: it is better to build that trust before the brakes are relaxed. The electors are not suddenly going to vote Conservative because they think the Tories will spend more than Labour. They just might if they think that Labour is going to raise taxes before it has ensured the money is well spent.