Chancellor plans further public sector reforms

Gordon Brown proposed a further round of public sector reforms last night to enable Labour to deliver Tony Blair's vision of "personalised" services.

Gordon Brown proposed a further round of public sector reforms last night to enable Labour to deliver Tony Blair's vision of "personalised" services.

In a keynote speech, the Chancellor moved to head off a row with Blairite modernisers who have accused him of opposing the inclusion of radical changes in Labour's general election manifesto - a charge he angrily denies.

The issue is sensitive because Mr Brown is widely expected to succeed Mr Blair during the next parliament if Labour wins a third term, and therefore wants the party to fight on a programme with which he is comfortable.

Anxious to dismiss speculation that his supporters are manoeuvring against a weakened Mr Blair, Mr Brown went out of his way to stress that he was working closely with the Prime Minister on Labour's reform agenda. He played down reports that five-year plans for health, education, transport and the Home Office, to be published in July, could be a more radical, Blairite version of the government-wide spending review he will unveil in the same month.

The Chancellor told the Social Market Foundation: "In health and the public services the programme of reform is proceeding faster than ever and that reform will go on and on. Tony Blair and I are working closely on both our spending round and the five-year departmental plans for the future: radical plans for investment matched by reform which we and the Cabinet are also working through together, reform plans that we will outline in the next few weeks, reforms on the basis of which Tony Blair will map out the road ahead." Mr Brown tried to square the circle between his view that there is a limit to the role of the market in public services and Mr Blair's desire for more choice for consumers. He said: "We can show that public funding and largely public provision can not only be equitable and efficient but can provide personalised services as well."

He added: "Achieving this vision of personalised public services - meeting the individual needs of all our citizens - requires continuing reform in the way we deliver public services.

"This is the process on which the Government has embarked and on which we continue to push ahead, as we shall show in the spending review in the summer."

The Chancellor stressed: "This vision is not of personalised services just for the few, for those who can afford to buy them in the market. It is for all. For personalisation is not opposed to equity; it is at the very core of what equity means. Achieving the goal of equality of opportunity - enabling each person to achieve their own potential to the fullest - requires a tailored approach that takes into account each person's unique circumstances."

Hilary Armstrong, the Government's Chief Whip, briefed Mr Blair on the views of Labour MPs yesterday. She reported that there was no groundswell of support for the few backbenchers who have called publicly for him to stand down.

Patricia Hewitt, the Trade and Industry Secretary and a leading Blairite cabinet member, said when asked whether she thought Mr Blair would lead the Labour Party into the next general election: "Of course, absolutely. I have never had any doubt about it."