Public service reform: warm words, but the detail will be a minefield

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Tony Blair went back to square one yesterday as he tried to win the support of public-sector managers for the Government's much-trumpeted plans to reform state-run services.

The Prime Minister, who launched a glossy pamphlet, Reforming Our Public Services, praising Britain's "skilled, dedicated and highly motivated public servants", has been here before.

In January, he made the same pitch in a speech in Newcastle, only to undo his work nine days later by branding opponents of change as "wreckers". Union leaders who welcomed the first speech were spitting blood about the second.

These confusing messages epitomised Labour's headaches over the reform plans that were the centrepiece of the party's election manifesto last year. Today the Cabinet meets for an "away day" session at Chequers to try to thrash out a more consistent and coherent strategy for public sector reform.

It has taken a long while for the penny to drop at Downing Street that the second half of the Government's "investment and reform" agenda can be achieved only if staff "buy in" to the strategy.

In effect, yesterday's 28-page pamphlet offers a deal to headteachers, police superintendents and hospital managers: become an ambassador for change and you will get more freedom to decide how to implement it.

As Mr Blair says in the document: "Whitehall is serious about letting go and giving successful front-line professionals the freedom to deliver these standards. I know it has not always felt like this. I hope we are learning from experience but I want to hear from you on where we can do it better."

Managers have every right to be sceptical about whether the Government will really "let go". It is true that there has been a cultural shift in Downing Street. Mr Blair now recognises that he cannot simply "flick a switch" and secure improvements on the ground.

However, not all cabinet ministers are ready to "let go". They want quick results, so the temptation is to unleash a blizzard of initiatives and targets for front-line staff. The resulting headlines excite expectations among the public, while sometimes leaving staff chasing their tails as they try to catch up. It is not surprising that the voters barely notice any difference.

Ministers insist that they had to set national standards before they could devolve power to a local level. In the health service, for example, the Government has set up a Commission for Health Improvement, and will now ensure that 70 per cent of the budget is passed downwards. But the jury is still out on whether Labour can really abandon its "command and control" instincts.

The reforms have been dogged by controversy over what the document describes inoffensively as "expanding choice". To the unions, that means privatisation by the back door, although the Government denies that is on the agenda.

The pamphlet admits that the private sector does not offer "a panacea to transform our public services". Ministerial rhetoric has often implied otherwise in the search for a "big idea" for Labour's second term. Yet for all the hard talk, private hospitals will still only carry out 1.5 per cent of all NHS operations.

The Government has struggled to put flesh on its rhetorical bones. Yesterday's document contained more warm words than fine detail, resorting to the well-worn Blairite slogan, "what matters is what works".

Thrashing out the detail is proving a minefield. Stephen Byers, who has responsibility for local government as well as transport, headed off a rebellion at last autumn's Labour conference by promising union bosses that private sector contractors running public services would not be able to create a "two-tier workforce".

It is understood that Mr Byers is pressing Mr Blair to honour this commitment. But Downing Street has been lobbied fiercely by the Confederation of British Industry, and is considering a code of practice rather than statutory guarantees for workers.

No decision has been taken, but the issue highlights another problem: will the private sector get involved if it has to meet public sector wages, conditions and pensions? On the other hand, how will Mr Blair win the support of public servants if they face pay and pension cuts? There is still a lot more to be done to square the circle.