Tony Blair's policies on public services are not radical. But they are sensible

The Government's approach is to hail choice, but to do so in a way that recognises the limits of what is possible

Since the Government came to power in 1997 the same nagging question has whirled around ministerial circles. It is one of the great conundrums of modern times. How can a government raise standards in public services without stifling them? The current Government has attempted to answer the question several times. It began by seeking to pull most of the strings from the centre but without greatly increasing public spending. If there was a problem in a hospital in Sunderland the Health Secretary would almost drive up to the North-east to sort it out himself.

Since the Government came to power in 1997 the same nagging question has whirled around ministerial circles. It is one of the great conundrums of modern times. How can a government raise standards in public services without stifling them? The current Government has attempted to answer the question several times. It began by seeking to pull most of the strings from the centre but without greatly increasing public spending. If there was a problem in a hospital in Sunderland the Health Secretary would almost drive up to the North-east to sort it out himself.

Inevitably there were plenty of problems, not just in Sunderland, partly because the NHS was short of cash. Realising that the low level of investment was a central factor Tony Blair and Gordon Brown announced substantial increases in spending. Having agreed the higher level of investment they sought to keep their distance, partly by appointing more regulators and quangos. Now Mr Blair seeks to address the conundrum by devolving power even further away from the centre, giving it to the individual patient and parent. In theory, at least, you cannot get further away from the centre than that.

The immediate context of the raging debate highlights the urgency for reform, but also the complexity in bringing it about. The brilliantly forensic report published this week by Michael Bichard on the incompetence and negligence of the police and others in the build-up to the Soham murders is emblematic. Evidently the police force is in need of sweeping reform. But how does the Government bring about further changes?

As Michael Brown argued in The Independent yesterday the Bichard report points implicitly to the need for a national police force, to bring about greater co-ordination and higher standards across the country. Yet such a move would go against the fashion for devolving powers. The Tories, for example, propose to give local communities the right to control and elect their senior police officers. A Conservative Home Secretary would have little power to deal with incompetence and inefficiencies in the police force.

One way of attempting to make schools and hospitals more efficient would be to create a real market, compelling people to pay directly for what they choose to use. Poorly run schools and hospitals would face the threat of closure and, more positively, have financial motivations to improve.

But the flaws in such a drastic reform are obvious. Those on low incomes would lose out. Co-operation within public services is as important as competition. No government could contemplate the closure of many hospitals and schools in a country that has suffered from a lack of capacity for decades. Mr Blair sometimes speaks the language of the market place, but as far as I can tell from his speech yesterday he is, quite emphatically, not moving in that direction

So the question persists: How to make the poorly run schools and hospitals better without a price mechanism? The Government's answer is to hail choice for patients and parents, but to do so in a way that seems to recognise the limits of what it is possible to achieve. Those limits are severe and unavoidable so ministers are wise to acknowledge them. As I pointed out last week, the right to choose is dependent on increased capacity. Indeed choice only works properly if there is surplus capacity. In spite of significant progress we are not at that point yet in Britain, not by a long way.

Mr Blair appears have more realistic aspirations, seeking to empower patients and parents by introducing more flexibility in a system that is unnecessarily restrictive. In the future patients will be able to choose from a range of hospitals for their treatment. As a result complacent hospitals will not be able to take their patients for granted, although how the better hospitals will meet the increased demand is not entirely clear. If we all get to hear about a brilliant hospital we will all want to go there. Either the doctors and nurses will die from over-work or we will die waiting.

Fortunately the new flexibility is only part of the package. The Government is still pulling quite a few of the strings. This is unavoidable unless a service is wholly privatised. After all ministers are responsible for raising the money and get the flak when hospitals fail. Rightly they are still setting some national targets.

These poor old targets have gone out of fashion, not least among those who provide the services. That is partly because they make the providers much more accountable, placing pressure on all hospitals to raise their game, knowing that they will be exposed if they do not. Targets are a form of empowerment for users, as they provide information about the performance of their hospitals.

There is also a third part to this package, the level of spending. It needs to be high for the foreseeable future in order to catch up with the rest of Europe, let alone bring about a situation where there is surplus capacity. Standing back from the hype this is the package the Government appears to be offering - a pledge to maintain high spending levels, a commitment to use targets to raise levels across the board, and a limited degree of empowerment and flexibility for users of services, partly in the hope that this motivates poorly run schools and hospitals to improve.

This strikes me as a sensible combination although not quite as sweepingly radical as Mr Blair sometimes suggests. It is the Conservatives who are being radical, but not very sensible. Tentatively they are introducing a pricing mechanism, seeking to create a market by offering a subsidy to patients who use the private sector.

There are parallels here with the Conservatives' approach to Europe. They recognise and articulate the frustrations many voters feel, but offer a wholly unrealistic alternative. There is little evidence that most voters would prefer private treatment even when it is subsidised. Private healthcare is expensive, unpredictably costly and not always as good as the treatment offered in the NHS.

The Conservatives have yet to explain why an expanded private sector would lift the performance of the NHS. If the best doctors and nurses head for a better-paid and well-resourced private sector, the main consequence would be a weaker NHS attended by the poorer patients. Conversely if the NHS improved greatly, why would anyone want to pay out for the private sector?

There is a danger for the Government that it oversells what it is seeking to do, giving the false impression that patients will have the choice of attending the best hospitals in the country with a click of their ailing fingers.

But there are some encouraging signs that it has moved on from those days when a Prime Ministerial visit to a council estate was presented as a "welfare revolution". The Conservatives are taking a big risk in moving so defiantly on to this terrain, a tax-cutting party with costly spending plans. I will be surprised if the voters reward them for their boldness.

s.richards@independent.co.uk