Brown 'putting brake on Blair's reforms'

Labour MPs are worried that Gordon Brown may be slowing the pace of key public service reforms he inherited from Tony Blair, despite promising to stick to a New Labour agenda.

Some backbenchers have expressed fears that Labour is retreating to what Mr Blair called the "comfort zone" by adopting policies which play well with the party rather than the wider public.

Their concern has been prompted by apparent policy shifts in health, education and welfare. Mr Brown has already dropped plans for a supercasino in Manchester and is reviewing the Blair government's decision to downgrade cannabis and allow 24-hour drinking.

Labour MPs have begun to ask ministers privately whether there is a co-ordinated drive to abandon Mr Blair's domestic agenda, or whether ministers are acting individually.

Alan Johnson, the Health Secretary, is expected to announce shortly that the role played by the private sector in providing surgical treatment centres and diagnostic services will be much smaller than the £700m of contracts planned by the Blair government. The Department of Health could have to pay millions of pounds in compensation.

Alarm bells are also ringing about a review of Mr Blair's flagship programme of city academy schools to be conducted by the Downing Street delivery unit. It has been ordered by Ed Balls, the Schools Secretary, Mr Brown's closest ally.

The review will look into whether the academies have improved schooling in the most disadvantaged areas. Although ministers say there is no question of the scheme being abandoned, the move has raised eyebrows because Mr Balls has called in No 10 to assess the work of his own department.

Pro-reform MPs are anxious that Peter Hain, the Work and Pensions Secretary, has watered down proposals from a review by City banker David Freud for private firms to run 11 region-wide pilot projects to get the hardcore unemployed back into work. He has announced a more limited trial.

One Labour MP said: "It's not clear whether there has been a decision taken at the top to move away from key reform policies. People were relaxed about Gordon's changes on casinos, cannabis and 24-hour drinking, which were associated with Tony. But the changes on health, education and welfare-to-work seem more significant."

Former ministers including John Reid, Alan Milburn, Stephen Byers and Charles Clarke are believed to be concerned about the policy changes on key public services but do not want to voice that publicly for fear of being accused of undermining the Brown government.

But other Labour MPs said yesterday the anxiety was not confined to Blairites, saying that some mainstream backbenchers in marginal seats were alarmed. "People are worried that a pattern is emerging," one said. "It looks like a retreat from some of the totemic policies under Blair."

Allies of Mr Brown denied emphatically he is dumping the Blair reforms. They said he was accelerating the city academy programme, that the Health Minister and surgeon Lord Darzi was bringing in more radical NHS changes than the Blair government considered and that intensive work was under way on welfare reforms going beyond the Freud report.

But Tories plan to accuse Mr Brown of being anti-reform. Michael Gove, the shadow schools secretary, said the review of city academies was an ominous sign. "Ed Balls has has deprived academies of greater freedoms, and he worked to sabotage the reform agenda when he was at the Treasury. Now it looks as though he is preparing to abandon ... the agenda of greater school freedoms and new entrants driving up higher standards in disadvantaged areas," he said.

The criticism on the Labour backbenchers follows doubts about whether Mr Brown has spelt out a clear vision, as he promised to do when he announced that he would not call a general election this year. The Prime Minister has since made speeches on liberty, education and foreign affairs, and unveiled his first Queen's Speech since succeeding Mr Blair, but some MPs say he needs to show a clearer sense of direction.