Brown wins battle with Blunkett on crime cash

Gordon Brown has torpedoed a bid by David Blunkett for a huge rise in the Home Office's annual £10bn budget to step up the fight against crime.

There have been sharp clashes between the Chancellor and the Home Secretary at meetings of a Cabinet committee thrashing out a three-year public spending blueprint to be published in July.

One Cabinet minister also bidding for Treasury funds described Mr Blunkett's bid as "astronomical" and "unprecedented." He is proposing that some elements of his budget rise by 20 per cent over three years from next year.

Relations between Mr Brown and Mr Blunkett, who are the two front-runners to succeed Tony Blair, are said by Cabinet colleagues to be strained. They had a skirmish on the eve of last week's Budget over whether the Home Office would receive a cash top-up this year. After Mr Blair intervened, the Chancellor announced an extra £180m to tackle street crime, terrorism and prison overcrowding.

But a much bigger battle is being fought out on the Cabinet committee on public services and spending, chaired by Mr Brown. The Chancellor has challenged Mr Blunkett's strategy of "talking up" the issue of law and order at a time when crime is falling overall, warning it might heighten the public's fear of crime.

He has also expressed scepticism about the value for money achieved by previous Home Office initiatives and whether the high "up-front" cost of Mr Blunkett's reforms to police working practices will deliver long-term benefits. Mr Blunkett has argued that his spending bid was in line with the Government's strategy of "money for modernisation".

But the Chancellor's room for manoeuvre is limited following his Budget pledges to inject £40bn into the NHS over five years and to raise "significantly" the share of national income spent on education.

Health, education and social security have already soaked up an estimated £293bn of the £511bn total spending for 2005-06. This means that law and order, transport and defence will be squeezed.

Last night the Treasury refused to comment, while a Home Office source said: "Relations with the Treasury are pretty cordial, because we did well out of the Budget. There is no ill-feeling. We have no problem with proving that money will deliver results."

Yesterday the Chancellor said that "no blank cheques" would be issued during the spending review and warned ministers their cash bids will be judged on how services to the public would be improved.

He told a conference organised by the Unison trade union: "Public services exist not for the public servant but for the public who are served ... In the coming spending review, there will be even more focus on standards based on evidence of customer satisfaction."

Mr Brown called for pay restraint in the public sector, saying "discipline will be our watchword". In return, he promised, the Government would devolve decision-making to successful frontline staff.