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Beneath the dynamic surface, Brown is dismantling Blair’s public service reforms

18 July 2007

3:29 PM

18 July 2007

3:29 PM

Beneath the dynamic surface, Brown is dismantling Blair’s public service reforms

When ministerial limousines line Great Smith Street in Westminster it is normally a sign that the Cinnamon Club is doing brisk trade. This upmarket Indian restaurant has become so popular with MPs that it has wired up a division bell in its foyer to tell them when to vote. But last Wednesday evening the attraction lay in the building opposite, where the Trades Unions Congress was holding its summer reception. Inside, newly promoted ministers and unionists were gladhanding each other like old friends.

Gordon Brown was, naturally, the star attraction. The Prime Minister delighted his hosts by promising that he would next time bring with him ‘Comrade Digby Jones’ — the ex-director of the Confederation of British Industry who is now a Labour trade minister. The tension between the unions and New Labour, a hallmark of the Blair years, seemed to have entirely dissipated. Superficially, it is hard to see why. Mr Brown has, after all, pledged he will stick to the Blairite agenda which the TUC so despises. Hasn’t he?

The closer one studies the detail of Mr Brown’s proposals in the last few days, the clearer the unionists’ cause for celebration becomes. While providing spectacular entertainment, from Tory defections to the scrapping of the Manchester supercasino, he has been silently and systematically working his way through Tony Blair’s public service reforms and stealthily undermining each one. His work has been technical, as understated as one of his Budget footnotes — but no less deadly. The result is a significant shift in government policy.

To understand what the Prime Minister is up to, we must go back to the root of his conflict with Tony Blair. Around the time of the 2001 election, Mr Blair had concluded that central government diktats did not work, and the surest way to improve public services was to have schools and hospitals compete with each other for the custom of the parent and patient. He wanted independent schools and hospitals to enter the state system, to generate this competition. His principles were sound, simple — and, of course, Conservative.


For equally solid Labour reasons, Mr Brown opposed him. Now and again, he would recite his creed: that the ‘consumer is not sovereign’ in healthcare, and that the laws of the market don’t apply to public services. He was happy for companies to compete and to do disgusting capitalist things to each other — but he did not want the public sector so defiled. His Treasury resisted the public service reform agenda from the top, while local health and education authorities resisted from below. By the time Mr Blair finally left office, his achievements were nugatory.

Today, less than 1 per cent of the NHS budget is in the hands of outside medical companies. Of Britain’s 3,300 secondary schools, just 47 are City Academies. This falls substantially short of the critical mass which the ‘choice agenda’ needs to work. So Mr Brown does not have to kill something which Mr Blair scarcely brought to life. He knows that if no more outside competition is brought to bear on the local authority cartels, the fledgling reforms will wither and perish by themselves. He need not wield a knife.

First, health. Mr Blair’s idea was to bring in a new breed of mini-clinics called In­de­pendent Sector Treatment Centres. They would be privately run, but carry out operations for the NHS. Mr Blair’s hope was that they would one day account for a tenth of the market. But it now seems that the NHS Trusts, which long resented the new clinics, have already started to edge them out.

Surrey and Sussex NHS Trust, for example, has cancelled the contract for BUPA’s clinic without any convincing explanation. This was not at Mr Brown’s behest. But the Trust (itself beset by financial and quality problems) correctly sensed that central government will no longer protect these treatment centres. The BUPA clinic in question was recognised as one of the best, so its fate serves as a warning to any other private firm thinking of committing. There were similar moves in Cumbria last week.

Mr Brown may well rewrite the NHS script in its entirety. One of Alan Johnson’s first acts as Health Secretary was to announce a ‘once-in-a-generation review’ of the NHS. The FESC system which Mr Blair hoped would provide a functioning purchaser-provider split in the NHS has been mysteriously been put on hold by the Treasury. Such acronyms mean little to the outside world (in fact FESC stands for Framework for procuring External Support for Commissioners), but the significance of such changes will be clearly understood throughout the NHS establishment. It means the Brown counter-revolution is quietly well underway.

In education, a twin-track strategy is at work. Publicly, Mr Brown has praised City Academies, the quasi-independent schools which Mr Blair hoped to see spring up. Lord Adonis, joint architect and implementer of the scheme, remains in place as schools minister. Mr Brown’s ministers have openly pledged to expand the scheme. But the new restrictions are strangling the reform into non-existence. The Academies are to lose their independent sponsor, adopt the national curriculum and — crucially — be subject to greater control by town halls.

The whole point of Mr Blair’s Academy programme was that the schools were independent, sometimes explicitly branded like the Harris Academies in south London, always empowered to develop their own ethos away from the dead hand of council officials. Local authorities disliked the idea so much that they would drag Lord Adonis to the High Court attempting to blackball these rival schools. It is not hard to work out how they will use their new powers. The name ‘City Academy’ may continue, but they will be indistinguishable from other schools. Lord Adonis is now running a ghost programme. It is over.

Mr Brown is a master of political distraction. While the Westminster pack has been kept entertained by his colourful Cabinet signings and scrapping of the Manchester supercasino, he has quietly reversed the reform process in such a boring, technical way that almost no one has noticed. His every move is being monitored by Reform, the respected think tank, which will later this month publish a report documenting ‘a very clear and ominous pattern of rejection of the key reform elements’ of the Blair years.

This is why Mr Brown and his ministers were being plied with chocolate-coated strawberries by trade unionists last week: the Prime Minister has delivered for them, especially in the public sector. All this creates a tremendous opportunity for the Conservatives. If David Cameron has the stomach to pick up where the ex-Prime Minister left off (which would mean ditching the woeful producer-friendly Tory health strategy), a prize awaits him. He could plausibly claim (as George Osborne has in the past) that Mr Blair was on the right track, but stranded in the wrong party, which is now reverting to type. And that there is only one way to deliver meaningful public sector reform in Britain: vote Conservative.


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