Steve Richards: The Tories want to deliver improved public services. But does their approach add up?

By coincidence the Conservative leadership and a left-of-centre pressure group held seminars this week on precisely the same theme. Both debated the role of the state in delivering public services, a pivotal policy area and one that impacts on all our lives. The first gathering took place on Tuesday, attended by David Cameron and several members of the Shadow Cabinet. The second was held yesterday morning under the auspices of Progress, described often as "Blairite" in outlook.

The gatherings did not make the front pages, but in their different ways they will have a big impact on the next election and beyond. As one of the contributors noted at the Progress meeting, Labour will not win the next election by erecting the old familiar dividing line between investment and tax cuts. It will need to tell a much more compelling story if it is to win a fourth term.

Similarly David Cameron told the Conservatives' seminar that they would not win by being only a "good opposition" or focusing alone on economic matters such as the price of petrol. They must also address issues such as the quality of public services and how they are delivered.

The tone of the Conservative gathering exposed one myth, that the party's leading figures are a bunch of student politicians playing games. The meeting was serious grown-up politics, and not staged for the media's benefit. Apart from myself there was only one other journalist in attendance. This was also the latest of a series of such seminars and not a superficial one-off in a crazed attempt to look serious.

I cannot think of an equivalent series during Labour's much praised period in opposition between 1994-97 when policy was decided largely between Tony Blair, Gordon Brown and their respective advisers. Here there was a public dialogue between a variety of Shadow Cabinet members and local providers. As Cameron observed, such meetings help to bring themes together.

I have been to enough of these gatherings now to be convinced that they are genuine about addressing issues relating to social justice. Their approach is not only about crude political positioning, although of course that plays an important part in their calculations. At Tuesday's seminar, speaker after speaker placed a focus on reforming public services to help the disadvantaged and on improving social mobility. David Willetts recently went to a conference in New York on the issue. The cabinet minister Ed Miliband was also there. I am sure Miliband would acknowledge that, although there are significant differences between them, Willetts is sincere in his aspirations.

At a recent Shadow Cabinet meeting, Michael Gove suggested that social mobility should be an underlying theme in Conservative policy-making. Although I have doubts about some of the means, the emphasis the Conservatives have placed on these issues is itself a factor. Words matter. If they win and fail to deliver on social justice after all this talk they will lose credibility fatally.

One of my doubts about their means of achieving such progressive goals relates to the Conservatives' assumption that they can save money, shrink the state and still improve public services. At the seminar Oliver Letwin gave the most detailed refutation of this I have heard.

In summary Letwin argued that, as a result of the Conservatives' proposals, the most disadvantaged would become less dependent on the state as the provision of services improved and the range of more flexible opportunities expanded. The transition costs would be addressed partly as a result of savings from some of the current inefficient spending.

Letwin's argument has a familiar ring. It is very similar to new Labour's pitch in the mid-1990s. Blair and Brown argued that the new dividing line was between productive spending and unproductive spending. They suggested that higher spending was not necessary, because they would have no need to pay the "bills of economic failure".

As they discovered in office the reality is more challenging. I am still not convinced that if the Conservatives are serious about genuine choice and letting go of the strings, that this is the route to saving public money. But in terms of sustaining an argument in opposition Letwin is on to something. After more than a decade in power Labour will have problems countering it.

More generally the Conservatives were exploring ways of transferring power to users of public services, the main theme of the Progress seminar. Inevitably at both meetings the contributors grappled with the issue of accountability: If others are given the power to spend money raised centrally who is accountable for the way the money is spent?

Broadly the answers were similar at both meetings. Speakers argued that the users of the services, being empowered, would hold the providers to account. That is a potentially potent answer, but still there are immense practical difficulties. Who decides how much money is devolved and how it is spent? How to measure whether the money is being spent effectively? As the Conservatives hailed the post-bureaucratic age they had implicitly appointed several more bureaucrats by the end of their meeting as they sought to answer these questions.

There were several echoes between the two meetings. Yet there were differences too. At Progress there was an emphasis on the importance of pooling sovereignty at a European level and beyond. The debate ranged more widely, taking in the role and purpose of taxation and the degree to which cash should be raised centrally and locally. There were also references to the potential importance of earmarked taxation and co-payments for public services. At some point soon Labour will need to have a fertile and yet potentially explosive debate about new and more effective ways to tax and spend. This will also take in highly charged questions about the appropriate level of taxation.

On the whole the Tory seminar was more focused and yet also more insular. There are two possible explanations for this. One is that the Progress seminar was closer to that of an opposition party bursting with ideas, while the Conservative event sought to focus relentlessly on what they would do in one policy area because they are close to power.

Alternatively it could be argued that, in spite of more than 10 years in power, parts of Labour are still full of ideas and the Conservatives have not worked out fully yet how the key policy areas inter-connect and are not ready for government. It will not be long before we know which explanation is closer to the truth.

The Conservatives do have one distinct advantage over Labour. This agenda is so challenging, risky, complex and half-formed. a party can only attempt implementation in a honeymoon period after an election victory. Whatever the many uncertainties in politics, the days when Labour can look forward to a glowing honeymoon are over.

s.richards@independent.co.uk