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Blair's Downing St team completes its takeover of power

Andrew Grice
Thursday 30 May 2002 19:00 EDT
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Tony Blair used this week's reshuffle to strengthen his already tight grip on the Whitehall machine by creating what amounts to a "Prime Minister's Department".

Downing Street smuggled out a significant change beneath the headlines about Alistair Darling, the new Trans- port Secretary, and Paul Boateng, Britain's first black cabinet minister.

Whitehall watchers will look back on Wednesday's reshuffle because, for the first time in memory, the Cabinet Office is headed by a minister who does not have a seat at the cabinet table. Instead Lord Macdonald of Tradeston, the Communist shipyard apprentice turned television boss, and his deputy, Douglas Alexander, a Gordon Brown protégé highly rated by Mr Blair, will report directly to the Prime Minister.

In opposition, Mr Blair decided to have a "strong centre" – the opposite of the wobbling and weakness displayed by the Major government – if he won power. But it has taken him five years to mould the Whitehall machine into shape.

Even now, Mr Blair is coy about admitting he has created a Prime Minister's Department, knowing this will provoke more criticism of his presidential style. Officially, the Cabinet Office remains a separate department. But it has been so slimmed down that it is now virtually an extension of No 10.

John Prescott's rather grand-sounding Office of the Deputy Prime Minister was split from the Cabinet Office, taking with him responsibility for social exclusion. The women and equality unit has been switched to the Department of Trade and Industry.

Other units based in the Cabinet Office already work for Downing Street, including the performance and innovation unit, Mr Blair's personal think- tank, which is headed by Geoff Mulgan, who also runs No 10's forward strategy unit, responsible for "blue skies thinking" such as Lord Birt's ideas on long-term transport policy.

The Prime Minister has two other advisers who report to Sir Richard Wilson, the Cabinet Secretary, but in reality work for Downing Street: Michael Barber, who heads the delivery unit, and Wendy Thomson, who runs the office of public services reform.

The rather bewildering structure has provoked complaints, not least from Mr Prescott, who has now abandoned his co-ordinating role to focus on his pet policies.

Lord Macdonald, who was Mr Prescott's number two until this week's reshuffle, was also frustrated. One Whitehall source said: "He's good but he didn't have the muscle to call in cabinet ministers and ask them why they were not delivering. Ministers take notice of No 10 but not someone below them in the pecking order."

Mr Blair tried to address this problem this week by announcing that Lord Macdonald now reports directly to him. But some officials believe he should have promoted Lord Macdonald to the Cabinet to give him the necessary clout.

Does the shake-up matter outside academia and the Westminster village? At one level, Mr Blair is merely fine-tuning the machine to make it more focused on public service "delivery", the buzzword at Downing Street.

One Whitehall source said: "There are now three groups working to different timescales: long-term 'blue skies' thinking; reform in the medium term; and delivery in the short term. It is a logical set-up."

However, some ministers resent the interference of the Downing Street policy unit in their business and are worried about the further concentration of power in Mr Blair's hands. One said: "It's fine for No 10 to move in when there is a crisis, but increasingly it is involved in day-to-day policy decisions."

The Prime Minister is likely to be questioned about the changes when he appears before the chairmen of Commons select committees in July. The Public Administration Committee is expected to launch a formal inquiry into the "new centre" in the autumn, inviting Mr Prescott and Lord Macdonald to give evidence. Tony Wright, the committee's Labour chairman, said: "There is much to be said for this approach to government, but its implications, especially for the accountability of No 10, need to be explored."

Blair aides say Downing Street is small compared with the White House and the offices of the German Chancellor and French President.

Some ministers believe the attention given to the Blair operation misses the point because the real power lies at the Treasury. Mr Brown is now chairing a cabinet committee thrashing out a three-year spending programme to be issued in July. Crucially, he has seen off the Cabinet Office's attempt to share the job of monitoring the targets set for Whitehall departments.

One insider said: "The Treasury is by far the most powerful centre because it has the resources and weight of a huge department plus the clout of an enormously powerful Chancellor."

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