MPs examine Blair and Brown's rift over reforms

The differing approaches of Tony Blair and Gordon Brown to the reform of public services are to be investigated by a committee of MPs.

The Public Administration Select Committee is to inquire into "choice in public services", an issue that lies at the heart of the recent disagreements between the Prime Minister and Chancellor over Labour's future strategy.

Mr Blair wants to embark on a new round of changes and believes that giving people more choice will drive up standards and "lock in" the middle classes to using and funding public services. Mr Brown is worried that offering more choice does not provide "equity" and benefits the better off rather than the poor. He believes the existing reforms should be allowed to bed down.

Tony Wright, the committee's Labour chairman, said yesterday: "Choice is one of the Government's key principles of public-service reform. It is also becoming daily a more prominent area of political debate. As part of our wider inquiry into reform, we aim to throw some light on the issues surrounding individual choice, equity and efficiency."

The MPs intend to take evidence from officials at Downing Street and the Treasury, ministers from other Whitehall departments and former ministers including Alan Milburn and Stephen Byers.

In a speech today Mr Milburn will challenge Mr Blair not to regard the private sector as the only alternative to the public sector and to give a much bigger role to voluntary organisations. Mr Milburn will say: "The present provision is a two-legged stool balanced precariously between public and private sectors. We need to give it a third leg. It is time to bring the voluntary sector in from the cold."

The former health secretary said voluntary groups needed a "level playing field" to enable them to play a bigger role as service providers. He said they should be awarded long-term contracts and allowed to borrow money from the financial markets, a move he described as "a voluntary- sector equivalent of the private finance initiative".

Yesterday ministers told the committee they would respond to its criticism of the Government's plethora of performance targets by involving public-sector staff in the setting of goals in future.

The MPs welcomed the move, but said in a report: "Aspirations are not enough. The [committee's previous] inquiry unearthed widespread suspicion and misunderstanding of the Government's targets policy among the people who matter most - those who use and provide public services at the front line."