Hamish McRae: How to restore Victorian values to our creaking public services

'They need to be properly funded. But they'll only get the money if they can show they will use it wisely'

How do we rebuild confidence in the state's ability to deliver high-quality services when most of our experience suggests that it cannot do so? What's worse, how do we do it when most talented young people would prefer to work for the private sector? One answer seems to be by bringing in foreign talent to run it.

How do we rebuild confidence in the state's ability to deliver high-quality services when most of our experience suggests that it cannot do so? What's worse, how do we do it when most talented young people would prefer to work for the private sector? One answer seems to be by bringing in foreign talent to run it.

Step back a moment. For the past three and a half years, the Government has been able to argue that inadequate public-sector services were the fault of the ancien régime. The NHS waiting lists? Chronic underfunding. The railways? Botched privatisation. The schools? Well, the Tories hated teachers, didn't they, so how could the schools improve?

But that explanation only works for a while. Privately, the more thoughtful members of the Government are terrified that they will be unable to deliver value-for-money public services during a second term. The saga of the Dome has seriously undermined the Government's self-confidence. The danger is that John Prescott's comment that if they could not make the Dome a success they "would not be much of a government" would be applied to public services in general.

The Dome was a failure, but thanks to the belated appointment of an energetic French ex-Disney manager, P-Y Gerbeau, it showed how even a disaster could to some extent be rescued if you hired the right person. Now another challenge looms: the London Tube. Fail there and the whole idea that the public sector can run things well will be blown to bits.

Enter the man who rescued the New York subway, Bob Kiley, to save the show. If a French expert in theme parks can make a decent fist of the Dome, can an American expert in public transport turn round the Tube?

If the Dome was the test case of public-sector competence during the first term, the Tube will be during the second. Sure, schools and the NHS are much more significant to the well-being of the UK as a whole. But education and health care are amorphous issues. In four years' time, they may or may not be a bit better, but they won't be radically better, given the pressures on them. The Tube, on the other hand, could be radically better. Indeed it has to be, for if it isn't, the game will be up. In four years' time, the railways ought at last to be running quite well given the investment planned. If the Tube isn't, it won't just be Ken who will carry the can.

Bob Kiley is clearly terrific. Ken Livingstone does not have much of a record for picking people but here he has scored a bullseye. I happened to meet Bob this week. The most interesting thing about him is not that he knows how to run a railway - the record speaks for itself. Rather it is his commitment to public service: the idea that there are social goods that it makes sense to fund centrally, to providing the entire community with something that is not just useful, but that it can feel proud of.

This is very New York. New York has become the great celebration of private consumption: of stock options, celebrity chefs, stretched limos with tinted windows. But it is also a temple to public provision that goes back a century and a half: the New York Public Library, the Metropolitan Museum, the amenities of Central Park. This idea that citizens deserve the highest-quality public services was noted by Anthony Trollope, who praised the superior quality of the free municipal schools compared to the board schools in London. He was particularly impressed by the attempt to give equality of opportunity: for example, the way in which children from poorer homes had their uniforms paid for so that they would look exactly the same as the children of the rich.

But Trollope was, aside from being a novelist, a public servant himself, the senior Post Office official who brought the pillar box to Britain. He was writing at a time when Victorian England was making the string of reforms that utterly changed attitudes to government: Peel's police, Rowland Hill's Post Office, the Trevelyan reforms of the Civil Service, and so on. In the space of about 30 years, we established the notion that the state could be incorruptible, competent and efficient - that it ought to be better than the private sector at getting things done.

That ethos of public service carried us through for 100 years, and remnants of it survive today in places such as the armed forces, the BBC World Service and the Foreign Office. But the catastrophe of nationalisation and the "winter of discontent" have undermined confidence. You can see that in the way this government invariably turns to the private sector when it wants something done.

New York has had its own catastrophe, nearly going bankrupt in the 1970s. The subway became filthy and dangerous, the police corrupt and ineffective. New York still feels a mess compared with London. Leave the Big Apple's glittering core and it is pretty shabby. But the gap has narrowed, and in crucial areas like the subway and policing, it is gaining ground rather than losing it. London, too, has got better over the last 20 years but that has been mostly the result of improved private-sector services and the improvement of the London economy.

The issue for London, and for the country more generally, is how to rekindle a sense not just of civic pride but civic competence. Public services need to be properly funded. But they will only get the money if they can demonstrate that they will use it wisely. The Tube manifestly has failed to do so. Sure, it has been chronically underfunded, but say that to the Treasury and they will point out that the managers used the money they gave them for improvements on paying for cost overruns on the Jubilee line. "We gave them what they asked for," a top civil servant said to me recently, "and then they went and wasted it."

Bob Kiley seems to have won his first skirmish with the Government about the ownership structure of the Tube, but the real task will be to spend the money more wisely than the present management has done. It is a big game, much bigger than the Tube itself. It is about rekindling confidence in the public sector as a whole.

It is funny, is it not, that we should look to a foreigner to sort out the problem for us. But then that is what we do these days. The Royal Opera House? The Dome? The English football team? British Airways? Maybe being an outsider enables someone to see things more clearly. Fingers crossed for Mr Tube.