The times when granny knows more than the Prime Minister

Since New Labour took office rhetoric has run ahead of reality in health, education and welfare

SPIRITED GRANNIES are bad news for politicians. When President Clinton made his first visit as a new world leader to Moscow, he called in at a freshly privatised bread shop. Turning to the nearest babushka with his most winning smile, he projected his soundbite: "Isn't it great to have so much choice these days? Which of these great breads should I take?" "It depends," said Gran sourly, "what kind of bread you like. The important thing is to hurry up, because there's a queue behind you."

East London produces its own brand of battling old lady, as Tony Blair discovered when faced with the unscripted interpolations of Miriam Lewis at the launch of the Government's annual report. One of the perils for leaders when members of the public are present is that unless, like the late President Ceausescu, you have sent the Securitate round first, you will now and again be confronted by someone who says loudly and repeatedly what everyone is thinking but had not dared to say to your face.

Mrs Lewis's complaints - that the Government's improvements in the health service are invisible to people at the sharp end of waiting lists - go to the heart of Mr Blair's problems in delivering the kind of changes that will enable him to claim that he has made a real difference to the lamentable state of public services in Britain.

The extent of his discombobulation was evident in his disjointed reply: "You are right: you've come to the top and it's important we have this dialogue." The emperor in the fable probably replied in a similar manner to the small child who remarked that he was wearing no clothes.

Mr Blair is acutely aware that Mrs Lewis is right - indeed, for weeks he was telling ministers so, even before meeting her. Since New Labour took office, rhetoric has run consistently ahead of reality in health, education and welfare reform. Small steps have been sold as great leaps for mankind, and par-for-the-course increases in expenditure in health and education presented as acts of unstinting largesse. The Government's end-of-term report too often blurs the distinction between the will to tackle deficits and really doing so, most absurdly when it claims to have effected an "integrated transport policy" at the precise time when half the London Underground is at a standstill and it has dawned even on the closeted inhabitants of Westminster that the rest of the South- east is going round the twist twice a day in perma-jams.

The Prime Minister clearly feels the strain of his status as the single, brilliant and true lodestar of the Government. Behind his criticisms of departmentalities lies a deeper complaint, namely that too many ministers are content to bask in his reflected glory while failing to get a grip on old troubles or prevent the dawning of new ones. The latest victim of this resentment was Jack Straw, previously a thrice-blessed member of Cabinet, who underwent a personal savaging over the summer passport debacle.

Some frustration with under-performance is understandable. But ministers are the product of the political culture that begot them. Until Mr Blair turned his worries, post-Kosovo, to whether the Government was delivering the improvements in everyday life that people wanted and expected when they voted out the Tories, members of the Cabinet were expected to do little more than provide a chorus of approval behind Mr Blair's strong solo voice, appear presentable on television, and co-ordinate their messages closely with whatever was driving the Prime Minister at any given time.

Policy initiatives have come either from the No 10 policy unit or, in the case of the rampant outbreak of target-setting, from the Treasury. Independent thinking in the departments has not been encouraged. Indeed, the choice of personnel has reflected this. The one exotic creature in policy terms, Frank Field at Social Security, was deemed too feverish and punitive an exponent of welfare reform, and cast aside.

No one ever expected Frank Dobson to preside over an overhaul of the principles and expectations we have of the NHS - that's not what Frank does. Frank does avuncular reassurance in entirely predictable crises. Education reforms are steered from Downing Street - which is just as well, given the legendary reluctance of the Department of Education to embrace real reforms in the way schools are run. Mr Blunkett is a competent frontman, and good at taking on the unions, but his heart is in gentle perestroika, not the next education revolution. For two years, Mr Blair's advisers told him that exhorting higher standards, rather than "messing with" structures in education, was the way ahead. Now they are realising that structures can make or break any attempt to raise standards. This lesson has been learnt in handling the worst-performing schools and LEAs, but it has not been applied consistently and broadly enough to tackle institutionalised mediocrity.

I stand by my prediction of some five years ago: we shall get real and lasting radical change out of this Government. But we are getting it too slowly. That can have a very high price for a leader, however well-intentioned and credible. The Downing Street policy unit is full of bright young people, but there is something of a closed-shop atmosphere about the thinking that emanates from there. Outsiders are asked to contribute, as long as the unthinkables that they think sit in the groove of the moment, be it stakeholding, the Third Way or the latest buzz, the knowledge economy.

There is nothing wrong with leaders entertaining the odd visionary - Margaret Thatcher got through quite a few court philosophers. They are useful synthesisers of an intellectual mood. But they are not a substitute for brave policy-making. The grand tracts do not help with the gritty old shortcomings. The really difficult questions still receive too little attention: how can we sensibly decentralise a schooling system that is too rigid, offers too little choice and is undermined by staid educational bureaucrats? How can we create an equitable funding structure for a more efficient health service? Is the great expansion in green-belt building, to which the Government is committed, merely accelerating the traffic Armageddon?

I would like to think that the coming reshuffle will see some new ministers appointed, who are prepared to have a go at tackling those irreducible quality-of-life questions that ultimately sort first-class governments from second-rate ones. Mr Blair's instinct for how people are really feeling out there cannot be faulted. He is keenly aware that their disappointments cannot be smothered by comforting words; they keep on festering into more damaging discontentments. Acting upon that insight will help him avoid one of the main causes of political fatality - complacency. But it does require a readiness to step up the pace and the breadth of change. Just being there is no longer enough.