John Rentoul: Like it or not, there it is. A Tory policy

David Cameron has two weaknesses, it is said. One is that he has few detailed policies; the other is that the policies he has are contradictory. For example, he is against "big government" but cares about poverty, which implies expensive state action.

I bring news from deep inside the inner workings of Team Cameron. There is more policy work going on in the engine room than is visible from the outside. One policy in particular is intriguing. That is the plan for a National Citizen Service for all 16-year-olds.

It is an idea with a long, long pedigree. I dimly remember plans for something similar when John Major was Prime Minister, to be run initially by the Prince's Trust. But the Trust chose to focus its efforts on the most disadvantaged young people. The idea of a universal scheme was taken up by David Blunkett, then the shadow Health secretary, who in 1993 wrote a "personal submission" to John Smith's Commission on Social Justice, in which he advocated compulsory community service for under-21s.

Fifteen years later, the by now former education secretary, home secretary and work and pensions secretary returned to the subject. Last year, he wrote a Fabian pamphlet arguing that everyone between the ages of 16 and 25 should do six months of intensive voluntary work. Apart from some gentle mockery for the idea of compulsory volunteering, the idea failed to gain traction.

This was not because it is a bad idea. On the contrary, it is a good idea; it is the sort of thing that politicians who are not in government are continually reinventing. But it is a very difficult idea. How should it be done? Who should run it? Who should do it? What should they do? How long for? What form of pressure to take part should be deployed?

Now, however, the Conservatives are designing a scheme that might actually be put into practice. One of the non-governing politicians who has advocated the idea is David Cameron: it was part of his campaign for the leadership of the Tory party four years ago. But he has gone further. First, he and his advisers gave it some hard thought. This resulted, two years ago, in a policy document. More interesting, it resulted in a policy change: they dropped the idea of making the scheme compulsory. I was told by someone involved in the plan: "You're not going to get anywhere at all by saying it is mandatory. That will just kill it for any teenager." At the same time, Cameron decided to do something really unusual: to set up a pilot scheme to test the policy while he was in opposition.

That scheme is now up and running. This summer, its first cohort began. It is being run not by the Conservative Party but by a charity called The Challenge, headed by Nat Wei, one of the founders of the Teach First programme that puts top graduates straight into teaching in deprived areas. It has barely been reported, partly because the party is not ready to go public with it yet; partly because it is not conventional politics. One aspect that is unusual is that the scheme is raising money from private sponsors – £500,000 for its first year. Cameron's advisers are justifiably pleased with themselves about the novelty of a political party raising money, not for propaganda but for a scheme that will act as a template for what it hopes to achieve if elected. Of course, the scheme has a propaganda purpose as well; and if it is a success, expect to hear much more about it over the next six months. But, for once, there is more to a political initiative than meets the eye.

The scheme is a genuine pilot. As a result of colliding with reality, it has been redesigned. Originally, the plan was for young people to spend six weeks on the scheme during their summer holidays. This has sensibly been reduced to three weeks full-time, followed by 50 hours in total over about three months, which is why the first recruits are only just coming to the end of their time. The scheme so far is tiny, with only 170 young people taking part in the first wave, but one of its key objectives is "scaleability" – a flexible model that can be franchised or adapted by other providers so that it can be expanded quickly. Next summer, the aim is to expand it six-fold to 1,000 young people; by then Cameron could well be prime minister, in which case he would have a working scheme to turn into a national programme.

As you may have gathered, I think it is a promising idea. The important feature is the ambition to make the scheme universal. Not compulsory – although that has not been ruled out at a much later stage – but universal, so that it is available to and expected of all 600,000 16-year-olds in the country. This is a huge project, but much of the benefit comes from its universality: that is what would give young people a sense of shared citizenship. Yet it is the very ambition of universality that makes it such an un-Conservative policy. A national scheme could not be financed by the private sector alone; one source suggested it might cost the taxpayer £800m a year, which sounds like pie in the sky in the present fiscal climate. More than that, it is an attempt at social engineering on a vast scale; of a kind of which many Tories would normally be deeply suspicious.

It feels like the sort of thing that the Government might have done to renew itself after the fall of Tony Blair, had it had the energy and ambition to do so. As Blunkett's interest suggests, it is as much a collectivist-left policy as a disciplinarian-right one.

The conventional wisdom that the Conservatives are unprepared for government is at least only partly true. A National Citizen Service may not make much sense from a party that opposes big government and prioritises balancing the books over all else, but it must be admitted that Cameron's people have done some of their policy homework.

John Rentoul blogs at independent.co.uk/eagleeye