Cabinet big guns to urge reform of public services

Tony Blair is sending his two revolutionary guards out this week to sell the case for reforming the public services.

Charles Clarke, the Secretary of State for Education, and Alan Milburn, the Secretary of State for Health, are embarking on a campaign to convince the public that the tax increases which are to take effect in April will not be wasted on inefficient services.

Their joint appearance at a press conference on Tuesday will be interpreted as the Prime Minister's counterblast to a speech by Chancellor Gordon Brown, in which he warned there are limits to how far market forces can be introduced into public services.

Mr Clarke and Mr Milburn have both had bruising encounters with the Chancellor in the past few months. Mr Clarke was able to pilot plans to allow universities to charge top-up fees through the Cabinet against opposition from Mr Brown and the Home Secretary, David Blunkett.

Earlier, Mr Milburn and Mr Brown were in open conflict over the issue of whether money borrowed by the proposed new foundation hospitals would count as part of the overall health budget.

But the new campaign also indicates the Government is in no mood to give in to backbench opinion. Mr Milburn will face fierce opposition when he introduces legislation to create foundation hospitals next month, with the former health secretary, Frank Dobson, leading the attack.

More than 150 Labour MPs are openly opposing top-up fees for university students, which will be included in legislation Mr Clarke is expected to introduce this year.

Mr Blair is determined to show that his government is prepared to tackle vested interests to give value for money in the public services. Ministers have been told to hold down public sector pay rises, to avoid the accusation that all the extra money has gone into pay packets.

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