Leading article: Private decisions on public funds

DECISIONS are being taken - today, tomorrow, over the next few weeks - which affect not only the way government will impact on the people of Britain in the early years of the new century but the very identity of Tony Blair's administration. They are part of the so-called Comprehensive Spending Review which was announced by the Treasury last July and is intended to produce, this July, a programmatic statement on the size and distribution of public spending over the rest of this parliament. That will give us the sharpest picture to date of what New Labour stands for.

But those decisions are being taken in private. They are being taken, often, with minimal input from the public which pays the taxes on which the spending depends. Departments are arguing with the Treasury about candle ends here, pennies there, while the big questions - like whether we even need certain departments - go unasked, let alone unanswered.

It is a symbol of that directionlessness - the sense that the Blair administration has no clear idea of what kind of state it thinks Britain should have - that in parallel with the Treasury spending review, but apparently unconnected with it, the new Cabinet Secretary, Sir Richard Wilson, should have been compiling a great (secret) report on "the centre" and the kind of powers the Prime Minister needs if he is to shape our collective future.

The review process started out promisingly. The Treasury announced terms of reference. Ministers considered taking their case to the country, seeking to involve the public in the big principles. Some did just that: Harriet Harman and Frank Field have, by accident as well as design, succeeded in informing the public about what social security spending is meant to accomplish. The Ministry of Defence made an effort, holding seminars attended by beribboned generals and top officials (though, sadly, very few press or public). But that was last autumn. Since, we seem to have fallen back into a round of bilateral conflicts which the public finds out about thanks to occasional leaks accompanied by the frenetic waving of bloody stumps. As we report today, the Prime Minister - ignoring his own injunctions about taking the strategic view - has been intervening energetically on the MoD's behalf, just like Margaret Thatcher used to.

The Blair government has, to give it credit, been much less paranoid than its predecessor about sharing information with the public. But it seems not to have registered a profound point. People's willingness to support government financially - to pay taxes - is directly related to their knowledge of what their government does. This spending review was an occasion to secure their fiscal assent - and their agreement to something this government is supposed to hold dear, the switch of national resources to areas such as schooling and social exclusion. It is a missed opportunity New Labour may sorely regret.